What seems like forever ago, back in January, I wrote down our personal finance and investing goals for 2011:
• Goal # 1 – Increase mortgage payments by $200 per month.
• Goal # 2 – Contribute $5,000 each to TFSAs.
• Goal # 3 – Optimize our RRSPs.
• Goal # 4 – Continue my full DRIP with Bank of Nova Scotia.
• Goal # 5 – Start my full DRIP with Fortis.
• Goal # 6 – Build up our emergency fund to $10,000.
In April, I provided you with an update on our goals – some good progress was made early actually. In July, I provided you with our summer update and the progress continued. This is my first year posting our goals in “black and white” for the world to see and scrutinize. I did this for two main reasons:
- Writing things down keeps me/us honest, I have a record of what we are trying to accomplish.
- Sharing our goals keep me/us accountable.
Let’s see how we’re doing so far with one more quarter to go!
Goal # 1 – Increase mortgage payments by $200 per month
I must be honest, we’re nailing this one! Since January 2011, we’ve maintained our monthly $200 extra payments on our mortgage and we have no intentions of stopping them. It’s exciting to use some online calculators to see what our mortgage, how much lower it will be, if we keep this up. Check out how you can pay off your mortgage sooner by using this handy government calculator. I know, I know, a handy government calculator???
Goal # 2 – Contribute $5,000 each to TFSAs
Very early on this year, on the upside, I maxed out my TFSA contribution for 2011 – goal 50% complete. On the downside we were not able to do the same for my wife’s TFSA – goal 50% incomplete. Instead of maxing out both TFSAs we needed money for a major home renovation – a new roof. This project cost us thousands of dollars and we’re still feeling the pain on our line-of-credit (LOC). The good news: we have a lovely roof. The bad news: we have a massive LOC and only one TFSA maxed out. Unfortunately we won’t accomplish this entire goal this year.
Goal # 3 – Optimize our RRSPs
Like I mentioned in April’s post, thanks to some savvy financial tutors like Canadian Couch Potato, Canadian Capitalist, Michael James, Andrew Hallam and many others in recent years, I’ve been schooled on the importance of managing our RRSPs efficiently for the long-haul, which means keeping our management fees as low as possible. The dark days of holding a bunch of high-MER mutual funds are over, thanks to their help and to be honest, an attitude to stop wasting our money. We’re now using dirt-cheap ETFs in our RRSPs to help us reach our retirement dreams and getting market-returns because of it.
We tend to optimize our RRSPs, that is, we only contribute enough money to avoid paying any income taxes come tax season. If anything, we might get a tax return when using our income tax software. So far, we’re accomplishing this goal in 2011.
Goal # 4 – Continue my full Dividend Reinvestment Plan (DRIP) with Bank of Nova Scotia
Regarding Canadian banks, I figure if you can’t beat ‘em you I might as well own ‘em – and so I do. We already own a couple of Canadian banks and Bank of Nova Scotia (BNS) is another one I want a significant position in. This is a great company. You might already know I’m a big fan of DRIPping. At this point I don’t own enough BNS shares to run my synthetic DRIP yet so I’m running a full DRIP with the transfer agent to help me own more BNS shares, commission-free. This year, I’m contributing about $100 per month to this and so far, so good.
Goal # 5 – Start my full Dividend Reinvestment Plan (DRIP) with Fortis
Many months ago, I finally purchased some Fortis stock. Like Bank of Nova Scotia, I’ve been increasing my holdings in this Canadian dividend icon for months now although I’m not as aggressive with the Fortis optional cash purchases as I am with BNS. Why? Well, BNS has been much cheaper and fallen more in price this year when compared to Fortis.
Goal # 6 – Build up our emergency fund to $10,000
We’ve been in our house for 9 months now and it doesn’t feel like a new house anymore, it feels like home. To make it feel this way, we’ve decorated, bought new furniture and other accessories for the home. Those items came at a cost, I guess they always do! We’d save for a few weeks, make the home purchases on our credit cards, pay off the credit cards in full and then repeat the cycle. Our place looks so much better on the inside now but it also looks better on the outside as well, with our new roof. That expense was HUGE though. To pay for the roof we depleted our savings and we took out an unhealthy line of credit (LOC). We’ve never had one before and it’s annoying, scary and pricy. We like paying cash for stuff. We want to get rid of that LOC. While borrowing rates remain at record lows our focus is paying this guy off as fast as we can – trying to contribute at least $500 to it every month. That money means there is no chance we can build up our emergency fund to our target this year. Hopefully the LOC is only a short-term issue until the middle of 2012. We want it gone for good. I’ll keep you posted!
Well, that’s my fall update of our personal finance and investing goals for 2011. To summarize, we’re on our way to accomplishing more than half of them but for a couple, we have no hope. Such is life I guess. We had great intentions, great expectations but falling short in a couple areas is not the end of the world – we’re doing well in other areas. I’m convinced we’re accomplishing many of our personal finance and investing goals because of this blog; writing them down, monitoring them and sharing the good, bad and downright awful with you.
It’s a journey and I hope you stay tuned for it!
What is your feedback on our progress?
How are you doing with your 2011 goals?