Welcome to my first financial goals update for 2016.
I like this napkin-drawing from Carl Richards, because it’s very true. All plans are basically a set of assumptions (since nobody knows what the future will bring). This doesn’t mean plans or planning in general is not important, but it’s the process of planning and re-planning that’s relevant for success. I live this reality every day in my Project Manager role and it applies to personal finances and investing as well.
We feel goal setting and monitoring every year help us get to where we want to be – financially. These goals for 2016 are not sophisticated. They’re not overly impressive. In fact, our goals are downright boring and I could fit them on the back of my business card. However, when it comes to personal finance and investing I’ve learned that simple and boring is exactly the approach you should take to be successful.
Let’s recap our goals and see where we’re at as of this month.
- Maximize our Tax Free Savings Accounts (TFSAs)
The TFSA remains a gift to all adult Canadians regardless of their income status. If you don’t know the rules of the TFSA yet please read this post here.
We recently maxed out both of our accounts for 2016, so we’re out of TFSA contribution room. We continue to invest in Canadian dividend paying stocks and ETFs inside these accounts for the purposes of long-term dividend income and growth. It feels great to have met this goal – maxing out our TFSAs every year is huge key to early retirement for us.
- Make double-up mortgage payments
I continue to say this on my site but it’s worth repeating: I don’t think there’s an absolute right or wrong way of tackling debt. We’re fans of getting rid of all high-interest debt first. That means we strive to never carry a balance on our credit cards. Other than a small car loan on the books for another 9 months, our only debt is the mortgage, but that mortgage is hefty enough. Our mortgage debt remains in the six-figures. If we keep after it though, we could potentially retire the mortgage by the end of 2020. We recently initiated double-up mortgage payments and we hope to continue those for the rest of the year.
- Save $5,000 for a future trip
Investing for our financial future is important but we’re not willing to delay consumption, fun and gratification entirely. That’s just boring. Last year, my wife and I vacationed in Scotland for about two weeks. This year we’re making plans to do some wine touring in BC and hopefully next year, we can take a trip south to a sunny destination like Panama or travel overseas to Portugal for some fun. We usually save the money for trips in advance, so this is where this goal comes in.
With these three goals in mind we are not anticipating taking on any new debt in 2016.
So far, so good. Goal #1 is done but certainly more work to do on goals #2 and #3. I look forward to sharing our progress with you later this year.
Thoughts and comments on our saving and investing goals for 2016?