“That’s why knowing the right answer, and doing the right thing, are very different.” – Jason Zweig
In the book Your Money & Your Brain author Jason Zweig discusses the emerging field of “neuroeconomics” and shines a bright light on the many bad things our investing brains drive us to do, which make no logical sense but unfortunately make perfect emotional sense. For example, in theory Jason says “we all have clear and consistent goals”. In practice, Jason believes most of us can’t recite our financial goals and when we finally make them we find they are not realistic and we’ll need to change them. I suppose the beauty of this blog is whatever I write on this site I can hold myself accountable to it; good or bad. Here’s a recap of what we set out to do in January this year:
- Put $300 lump sum payments on our mortgage every month ($3,600)
- Make a healthy contribution to one TFSA ($8,000)
- Save for and take a great trip ($4,000)
- Do not incur any new debt ($0)
Here is our update on those goals…
Keep slaying the mortgage dragon
Although borrowing rates remain low I’m convinced paying off our 6-figure mortgage (while saving for retirement) is the right thing to do. In terms of meeting this goal in 2013, we’re doing well. As of October 1st we’ve made $3,500 in lump sum payments on our mortgage. I figure we can make another $500 payment before Christmas and exceed this goal.
Fatten up the TFSA
Earlier this year, I maxed out my TFSA and since then we’ve been focusing on my wife’s account. Her TFSA contribution room was carried forward from previous years and with some good savings habits, we’ve made up some significant ground. Earlier this month we reached this financial goal. Instead of keeping cash in the account earning next to nothing (if not a loser to inflation) I decided to buy some National Bank (NA) stock. The stock price has climbed almost 10% since our purchase.
Work hard, play hard
We love to travel and because of a savings plan that was initiated back in the early summer our trip is now fully funded. We have aspirations of travelling in 2014 as well so we need to start saving for that trip soon. As much as possible, we save for our trips in advance. If we don’t have the money in the bank we don’t travel.
Pay off debt and stay out it
We continue to have no debt other than our mortgage and a car payment, which is more than enough for us. This is also why we cannot afford to take on any new debt of any kind. The house should be paid off in another 8 years and the car will be paid off in another 3 years if things work out for us.
There are only two more months to complete our goals. Got any comments on our financial goals? How are your 2013 goals coming along?