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2013 Financial Goals – April Update

“Cat: Where are you going?

Alice: Which way should I go?

Cat: That depends on where you are going.

Alice: I don’t know.

Cat: Then it doesn’t matter which way you go.”

-Lewis Carroll, Alice in Wonderland

You might recall I used this quote a few months ago because unlike Alice, I need focus and direction in my life; so I’m more like the Cat.  Earlier this year, my wife and I put together four financial goals to accomplish in 2013.  Here’s a recap:

  1. Put $300 lump sum payments on our mortgage every month ($3,600)
  2. Make a healthy contribution to one TFSA ($8,000)
  3. Save for and take a great trip ($4,000)
  4. Do not incur any new debt ($0)

Through end of March here is our report:

Lump Sum Mortgage Payments

While some investors may disagree with me, while borrowing rates remain very low, we’re going to pay down our mortgage using lump sum payments.  I have no idea where interest rates may be in a few years, so if they are higher, this means our future borrowing costs will be much lower thanks to extra payments made today.  So far, we’re just ahead on this one with $1,000 in payments made year to date.

Make a healthy TFSA contribution

Earlier this year, I maxed out my TFSA for 2013.   We’ve still got work to do on my wife’s TFSA.  Thanks to TFSA rules, contribution room is carried forward from previous years – we definitely want to take advantage of that.  As we make contributions in 2013 I expect we’ll buy a Canadian dividend paying stock or a low-cost Exchange Traded Fund (ETF) for the account.  We’re not buying bonds in this interest rate climate, the real return on bonds is pathetic.  So far, we’ve contributed $2,200.

Save for and take a great trip

We love to travel and see new places.  We just had an amazing trip and later this year we’d like to travel again.  Some close friends are considering a vacation this winter and we’d like to celebrate with them.  To enjoy this trip stress free, or afford to go in the first place, we need the money saved in advance.  This is our budget and we can’t afford to spend any more because we’ve got some home improvements planned in 2013.  So far, we’ve only saved $800 for this trip.

Do not incur any new debt

This is how I feel about debt.   There’s no point in making lump sum payments on the mortgage or making some investment if on the other end, our debt is increasing somewhere else.  Year to date, this has not happened.  The balance on our credit cards remains zero and because we’re slowly killing the mortgage and making investment contributions, the net worth is inching upwards.  We have the aforementioned renovation to pay for in 2013 but the bulk of the funds to pay for that were saved in 2012.

With some job uncertainty now in play (due to some reorganizations at work) it will remain important to kill off debt sooner than later and definitely not take on any more.

Got any comments on our 2013 financial goals?  What about your goals for this year, how are they coming along?

Filed in: Goals & Planning

10 Responses to "2013 Financial Goals – April Update"

  1. These are some excellent goals. One of my goals was to not accumulate additional debt while paying off $7,000 for the remainder of the year. So far both look like a stretch. We will definitely need to refocus when we get back from visiting her family. Keep up the good work.

    • Thanks Alan. So far, so good. I hope we can nail all of them this year. I’ll keep you posted. Good luck with yours, stretch goals are always good.

  2. Avrex says:

    Additional Mortgage debt payments. I completely agree.

    Yes, even with low interest rates, I prefer these additional payments.
    1. It brings peace of mind. There could be higher interest rates down the road. I believe it’s better to reduce debt.
    2. With you being a disciplined saver, it brings greater investment opportunities in the future. i.e. once your home is payed off, you’ll contribute even more money towards investments.

    • Thanks Avrex. I honestly struggle with the aggressive debt payments because cash is so cheap right now. I know it always won’t be this way, but unfortunately we have a large 6-figure mortgage and I sleep better at night knowing we are attacking it every month.

      I’m not sure how disciplined a saver I am…we just got back from Costa Rica 6 weeks ago :) Such is life, you gotta live.

      Hopefully by my mid-40s, I’ll have a healthy portfolio and I can look forward to retiring in my 50s. Then I can spend more time golfing, blogging or bugging people I used to work with ;)

  3. Chris says:

    @My Own Advisor

    I was actually curious as to what you meant by “cash is so cheap” could you elaborate on that?

    Thanks!

    • Borrowing rates are at near historic lows. They have been for many years. Many stocks pay more in yield than borrowing costs. That said, I’m uncomfortable with debt and need to reduce it before I think about leveraged investing.

  4. Well done Mark,
    You know we will be paying our mortgage in full in the next month or so and we are happy with that decision. For the same reasons you are choosing to pay it down we did as well. We are still young and have 30 or so years left to invest our money. I have plenty of room in my TFSA as well to catch up on but I also have RRSP room. I’m not sure how it’s all going to go down.. I wish I was as smart as you with investing on your own. That I’m envious about… you’re lucky that you understand. Keep up the good work mate.

  5. Great goals! and kuddos on your achievements so far!

    I also target my debts as my main enemy this year. I will open a TFSA later on this year once I’m done paying pension and unemployment contribution on my pay check. I need to fund a TFSA for my kids tuition as I want all of them (3) to go to private school at high school. man, things we do for our kids! hahaha!

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