To keep me honest but also focused, I post my financial goals on My Own Advisor. One thing I’ve learned over the years is I have a much better chance at realizing my goals if I keep tabs on them, and often.
Here’s a recap of our 2014 financial goals:
- Continue putting $300 lump sum payments on our mortgage every month ($3,600).
- Maximize both Tax Free Savings Accounts (TFSAs) ($11,000).
- Increase Registered Retirement Savings Plan (RRSP) contributions by $200 per month ($2,400).
Here’s our report card year-to-date.
Continue putting $300 lump sum payments on our mortgage every month ($3,600) – on target
Since January 2014 we’ve been meeting this goal. By making mortgage pre-payments automatic, we never see this money. Keeping some of our income out of sight is helping us kill our mortgage debt more aggressively. We hope to have our mortgage debt under $200k soon. If we keep up our pre-payment schedule, all things being equal, I’m predicting we’ll be completely debt free in less than 8 years.
Maximize both Tax Free Savings Accounts (TFSAs) ($11,000) – done!
I have some stocks that pay dividends in a non-registered account so I moved some holdings into my TFSA a few months ago. My TFSA is now out of contribution room. I suppose this is not really saving money per se, more like a swap of monies already saved. I hope to make up for if/when we surpass the goal # 3 below. Just last week, we saved enough money from late-2013 until present to max out my wife’s TFSA. Her account is now out of contribution room. I’m not sure what to buy yet in this account but I suspect it will be either an equity indexed product or a REIT since the prices for the latter are still decent.
Increase Registered Retirement Savings Plan (RRSP) contributions by $200 per month ($2,400) – on target
We recently cut the home phone cord (something I intend to write about soon) and with more small changes in 2014, I think we’ll be able to save more money and contribute to these accounts. We currently contribute a few hundred bucks a month to each RRSP and there is no intention of changing that, only increasing this amount during the course of the year. So far, we’re on target to meet this goal. Our hope is with a paid off home in a few years and maxed out RRSP accounts, we’re on our way to financial freedom.
Three simple goals with the same overarching goal as last year, do not incur any new debt. One goal down and two more to go. Stay tuned for more updates.
Got any comments for our saving and investing goals for 2014?
I’d love to get to that level of mortgage pre-payment! We’re going to increase ours in 2015 (we have a wedding and honeymoon this year so it just won’t be possible). I’m just a bit curious about your TFSA/RRSP strategy. Maybe you already wrote about it, but why not take advantage of the tax benefits of maxing your RRSP out instead of putting that money in your TFSA?
Sounds like a very big year ahead!
Regarding the TFSA, I prefer to max it out first, get those dividend stocks working for me sooner than later.
I definitely contribute to my RRSP, but I don’t max the account out, yet. I suspect in a few years, the RRSP will be fully maxed out. I don’t have much contribution room left and if any blog income is earned, it will go inside the RRSP this year.
Live on less than you have coming in, and allocate the rest to debt and investments… Worked for us and others I know, and I see no reason as to why it would not work for others. My only point would be that if interest rates look like they might start to bump up sooner (which I doubt) I would allocate more to the mortgage. Having a paid off home is unbelievably rewarding, and as such now I can borrow money, at a preferred rate, and deduct the interest to pop up my investments – Cheers.
Thanks for the comment Phil.
From what I recall, you’ve been very successful at investing (and killing debt).
Later this year, if all goes well with our goals, I will likely consider adding more money on the mortgage and non-registered investments. The mortgage is still over $200k. At our current payment rate, that debt is done in about 7.5 years.
The RRSP is almost maxed out so I want to leave contribution room for 2015.
The TFSAs are both maxed out.
We’re trying to do what we can to catch up for lost time!
Very wise. You should have been achieved your goals. Good luck!
I like your balanced approach. You are building up reserves for unexpected cash needs (TFSA), long term retirement needs (RRSP), and reducing your debt/buidling your net worth (house.) I think it’s a more sensible approach than trying to do only one thing at the expense of the other two. And of course if all goes well, all 3 end up giving you long term financial security both pre and post-retirement.
Trying my best Bet Crooks. I struggle with the approach now and then, it doesn’t seem like we’re doing one thing really, really well but at the end of the year, I hope I have a few modest objectives to show for it.
I’m striving for a $1 M+ personal portfolio in retirement and the paid off home of course, no debts. That’s for age 55. That’s the plan. Thanks for your comment.
Sounds like a GOOD plan! The real key is you have no debt (I don’t count mortgages unless the home is a crazy size/type compared to needs) and you’re saving steadily. Maintain your asset allocation steadily and you’re almost there!
It’s coming along…progress….
Well, our house and mortgage is both likely larger than we need, we are a family of 2 + cat. We could likely downsize but I love the space and the land and working outside this house offers.
I could live in a smaller house with no privacy, save money and be miserable or I could live here and be happy.
Good point about asset allocation. I hope my house is (eventually) not a big part of net worth.