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August Update – 2012 personal finance and investing goals

I typically share an update on our financial goals every quarter or so, but I’m ignoring that structure based on some good news to report.  In case I’ve lost you on this post already, here is a list of our personal finance and investing goals for 2012:

• Goal # 1 – Pay off our LOC by end of February ($2,000).

• Goal # 2 – Starting in March 2012 (after the LOC is paid off) put $300/month as lump-sum payments on the mortgage for the rest of the calendar year ($3,000).

• Goal # 3 – Maximize both TFSAs before end of year ($10,000 in contributions).

• Goal # 4 – Grow our emergency fund by $3,000 (to $5,000) by the end of this year.

• Goal # 5 – Optimize RRSPs ($5,000 in contributions).

• Goal # 6 – Save $3,000 for a great trip in the fall/winter.

Here’s our update:

  • Goal # 1 – Pay off our LOC by end of February ($2,000).

I hate debt and while I do live and spend for today, I’m trying to live without any borrowing costs except for major home renovations.

  • Goal # 2 – Starting March 2012 (after line of credit is paid off), put $300/month lump sum payments on our mortgage.

This goal remains a work in progress until the end of the year.  Since March we’ve been putting $300 extra on our mortgage every month.  If everything goes according to plan, that will make $3,000 in lump sum payments on our mortgage in 2012 – a guaranteed rate of return over 3%.

  • Goal # 3 – Maximize both TFSAs before end of year ($10,000 in contributions).

Earlier this year I maxed out my TFSA for 2012.  My wife’s TFSA has some contribution room left, a few thousand dollars, so we’ll continue to invest in this account via automatic transfers every month until the end of the year.

  • Goal # 4 – Grow our emergency fund by $3,000 (to $5,000) by the end of this year.

While I understand emergency funds aren’t for everyone they are for us.  No matter how stable things might seem, things can also change in a flash.  I believe an emergency is one of the worst times to dive into debt, so having an emergency fund helps us avoid that.  As of this month, we’ve completed this goal and met our target for 2012!  You’ll read about where our funds are going now that this goal is complete in goal #6.

  • Goal # 5 – Optimize RRSPs ($5,000 in contributions).

This goal remains a work in progress.  I’m confident we’ll be able to reach this goal just as we have in years past, since we focus on optimizing our RRSPs and not maximing them, sinking every investment dollar into them.

  • Goal # 6 – Save $3,000 for a great trip in the fall/winter.

This is our most exciting goal by far because saving is only so much fun.  After our debt obligations and investment requirements are met (yes, I put them in that order for a purpose) we enjoy travelling and spending money.  I am big believer spending on experiences not necessarily things, which makes travel a big priority for us.  We’ve recently made plans to travel south for a couple of weeks this winter and we can’t wait now that our plane tickets are booked for Latin America.  Last week, our travel fund started to take shape even with a meagre $50 automatic contribution set up for every 2 weeks and going forward.  I think after 6 months of contributions right up until our trip, this travel fund will add up rather nicely and we’ll barely notice the process.  If we complete our TFSA contributions before the end of December this year, and I expect we will, extra funds will go into the travel fund and this goal will be knocked off.

So, there you have it…two of six goals met this year with 4 more months to go.  There’s always room for better financial management but the journey is rewarding when you meet some small, meaningful goals along the way.  I will keep you updated on our progress later this year.

How are your 2012 personal finance and investing goals coming along?  Got any feedback on our goals?

Filed in: Goals & Planning, Travel

11 Responses to "August Update – 2012 personal finance and investing goals"

  1. Eddie says:

    Quite the list of accomplishments. I’m sure you’ll crush it of what’s left for the second half in the year. Good luck!!

  2. Echo says:

    Nice progress on your goals, Mark. I like how you got your emergency fund set-up before saving for your trip…it’s not easy to convince yourself (or your wife) that meeting your savings obligations first is usually the best approach.

    • Thanks Echo. Yeah, we wanted to get the EF to a moderate value before we start spending. This fund is truly for that, and I hope we never have to use it.

  3. Modest Money says:

    It looks like you’re doing well on those goals Mark. I like how you ‘optimize’ RRSPs rather than trying to maximize them. Obviously the TFSA is a better option long term. As I continue improving my finances I’m really going to have to start setting some goals. Setting goals and planning ahead tends to be one of my weak areas.

    • Hey man, we’re getting there. Thanks, re: optimize vs. maximize the RRSP. This makes total sense to us but for some, I’m sure they would disagree with me (which is fine). Personal finance is still personal. As you get older, I’m sure goal setting will hit you. Usually does.

  4. Rick says:

    Great goals!

  5. Shane says:

    Nice accomplishments!

  6. I have to get more concrete goals in our household. We have our budgets but it is good to have specific goals on paying down debt (we are not sure as to our future housing plans – if we will stay in Victoria or move to Ontario), so many questions!

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