2016 Financial Goals – March Update

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.

  1. 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.

  1. 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.

  1. 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?

20 Responses to "2016 Financial Goals – March Update"

  1. Great goals!

    Congrats on the TFSA top ups and on the mortgage double ups. You know I’m a big fan of both.

    As you can guess there’s also nothing but support from me on enjoying your hard earned money and rewarding your saving commitment with a nice trip.

  2. TFSAs are awesome – congrats on filling yours up. It boggles my mind that so many people don’t use them more. Unfortunately, there’s a lot of misinformation out there. I’ve had so many people over the years tell me that they’re useless because interest rates are so low — if only they knew that they aren’t limited to interest bearing accounts. That or they don’t know how to use them, and end up paying hundreds in penalties…

    Great goals btw 🙂

    1. Thanks GoGoAssets. Yes, I’ve heard the same noise myself over the years. I use the TFSA as an investment account almost from the very beginning. I think that just makes sense.

  3. For those not in the know, it should be noted that mortgage double-up payments (in whatever lingo your bank uses) are applied wholly to the principal; a wise decision.

    We’ve done the same, but a bit different — choosing the lowest regular payment (P+I) and augmenting with double-up (P) and anniversary (P) payments.

    1. Solid point about the double-up on the principal. Yes, hopefully we can keep that momentum for the rest of the year. We don’t do anniversary payments but we do pay the odd lump sum if there are any merits or raises from work. Otherwise, we simply hold the course with extra payments.

  4. When you have higher income, there can be enough left over money to maximize TFSA and RRSP. I wonder why people don’t do that. Will the earnings from the TFSA will be considered as income when we retire? Will it affect the CPP payments from government?

    1. Yes, you need to earn money, to save money, to invest money, no doubt! Maximizing our TFSAs is critical to our early retirement plan in another 10 years. If we don’t do it, we cannot retire early – simple as that. The earnings will not be considered income when we retire, money contributed to the TFSA is done with after-tax dollars so the government will not tax us twice. It will not affect CPP payments at all.


      Thanks for your comment DA.

      1. One has to be cautious as to what future governments will do. For now, TFSA income is not considered for purposes of taxation or benefit qualification. Nothing to say a government won’t change it. I can see a future government using income earned from a TFSA when calculating the OAS clawback as well as putting a lifetime contribution limit on it. Having said that, my recommendation is to use it as the legislation is written now and deal with any changes in the future. When I was growing up, TFSAs didn’t exist and my RRSP contribution limit was like $550.

        1. And there’s the rub Lloyd. The government’s will enact what they will. We’ll see if they touch the TFSA long-term. I suspect eventually there will be a cap such as a lifetime limit, such as $100k contribution room. Just a guess of course.

  5. Good work on your goals.
    As Like you, I believe that simple and boring is the way forward. Stick to a few simple goals and rules and success should follow.

    Good that you chip away the mortgage. We have also done already a great effort (refinance and lump sum payments) on the mortgage and now have reached a point where the tax advantage and the paid interest per year are almost equal. This was for me the signal to move on and leave this debt where it is. With the current plan, it should be paid down before we reach FI.

    Goal 3 is one that we made more real as well this year. It will impact our yearly Savings Rate. We prefer to balance living now with early Financial independence, so we are fine with the consequences.

    1. Thanks Amber Tree. Simple and boring works when it comes to money management I’ve learned.

      Yes, we need to chip away at the mortgage because I don’t want it hanging over my head long-term; no debt will provide lots of financial freedom long-term.

      Goal #3 is important because all work and no play makes Jack a dull boy!

  6. I think you’ll enjoy next years trip to Central America. We went to Costa Rica this February and had a great time. Other than a few roads that shock even a rural gravel driving guy from Saskatchewan, nothing but good times and great weather. Excellent and uncrowded beaches if you head off the beaten path.

    1. I hope so Derek! Isn’t Costa Rica great? We when there a few years ago and loved it. We were there for 2 weeks. Amazing beaches. I learned to surf there…simply awesome.

  7. I’ve also had an inkling to visit Panama, however I put that one on hold when our dollar tanked. The Panamanian currency is pegged to the US dollar, so just got much more expensive, while neighbouring countries did not. Just something to think about.

    I like to travel, but always mind my budget, so that I can travel more often and for longer. In one month I will be off to some new places in Mexico, second visit this year, 10 days in February was not enough.

    1. Yes, true about the currency but then again Barbara if you wait in life so optimal moments they can pass you by! We hope to go to Panama in another year or so. We have some ideas when but Portugal and a few other places on our list as well. So many places to go, so little time 🙂

      Great stuff on your trip to Mexico. That will be nice…and a second visit no less!! Nicely done. It’s been a few years since we’ve been there, Mayan Riveria for us.


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