2017 Financial Goals – November Update
2017 has been a blur…
December is now around the corner. That means we only have a few weeks left to realize these goals.
- Do not to incur any new debt.
- Maximize our Tax Free Savings Accounts (TFSAs).
- Make double-up mortgage payments.
- Save $5,000 for a vacation.
- Save $5,000 towards a new car.
- Top up our emergency fund.
Since our last update we’ve been busy saving (and spending) our way towards these goals. With 2018 inching closer here is where we are at…
- Do not to incur any new debt. I had doubts on this one earlier this year because I wasn’t sure if we could afford a newer car. See goal #5. Year to date, we have not incurred any new debt – so goal accomplished (so far). The only debt that remains at the time of this post is our mortgage. Now we need to get through Christmas shopping debt-free!
- Maximize our Tax Free Savings Accounts (TFSAs). Goal accomplished! We maxed out our 2017 TFSA contributions in January. We have the same goal in six weeks for 2018.
- Make double-up mortgage payments. Goal will not be accomplished. You may have read about our housing dilemma and we continue to work through that. Do we sell and buy a similar detached home in Ottawa? (No, because we can’t afford that – we’ve been priced out of the market for city single family homes.) Do we sell and buy a semi-detached home in the city? Maybe although that’s at the very top of our budget. Do we downsize from this house and buy a condo instead? Potentially, that’s our leading option right now. What does this have to do with our double-up mortgage payment? We’ve stopped it. While we continue to make more than the minimum payment on our mortgage we’ve turned down our double-up payment privileges. Over the last few months we’ve started to save up some money (and will continue to do so) for future moving costs or other home needs. When are we moving? No idea, but hopefully not this winter. I hate moving in any weather let alone winter…
- Save $5,000 for a vacation. Goal accomplished! Our trip to Portugal occurred in October this year and it was two weeks of international bliss. Here are some photos:
We tend to save up for our trips in advance. This way, we don’t have any financial stress when on vacation. We hope to take another international trip in 2018. Destination unknown right now. Saving for that will start in early 2018 after the Christmas bills are paid for and just as importantly, after our TFSAs are funded.
- Save $5,000 towards a new car. Goal accomplished! So far, so good with the 3-year-old Mazda now in the yard. We hope to own this car for another 10+ years.
- Top up our emergency fund. Goal accomplished! We keep our emergency fund at this amount. We’ll probably increase it by $1,000 in 2018 (and every year going forward) to fight inflationary costs and build our cash wedge for retirement.
Not too bad but we won’t hit every goal.
What about RRSP contributions?
They are no longer a goal. My RRSP is out of contribution room. My wife has some RRSP room left, but not very much. Her RRSP should be maxed out in early 2018. That would mean both our TFSAs and RRSPs will be fully contributed to within the year. That would be a HUGE milestone for us if we can get there in another few months.
Back to the present, that’s our update. A few weeks to go to hit at least one more goal. That would be a great year – and I hope we can pull it off.
Wow that’s awesome Mark that you’ll have both RRSPs and TFSAs maxed out!!! That is a huge milestone and not something very many people accomplish. Will you focus on the mortgage next or on taxable investing? Or building a cash buffer for a potential move?
Likely mortgage paydown over time. Taxable investing will cost us more (in taxes) over time as long as we are working. Thanks Owen.
Nice goal update. You guys are positioned well for whatever challenges come your way, and if they don’t are planned to capitalize on your efforts if challenges don’t arise… I’m amazed at how many people I’ve run into that do not understand that long term planning is the most effective way to stay ahead of life and what it throws at us. I’ve never been one to say this in the past as i have always been about growth, but I’ve been looking into becoming more of a dividend investor. I know you have some great resources i will be tapping as I see if I can adapt to that type of mindset. Why you might ask? Well, staying ahead of the growth curve is very labour intensive… dividend investing seems a little more passive, and I believe my family is willing to forgo the work it takes for the difference between growth returns and dividend returns… Who know, maybe I’ll find a comfortable place in between… I’f so i’ll be sure to share 😉 – Cheers
Great to hear from you Phil. Getting ready for the ski season? I recall you are a skier.
I think that’s the thing eh…plan ahead and by the process of planning – you’re better able to deal with things. Thanks for the kind words!
My boards are waxed and sitting on ready… Bring on the cold temperatures and snow! 😉 – Cheers
Nice job mark. We went to portugal 2 years ago. One of the nicest places ive been and the best excursion. (Sled down the roads) while its not this year having both tfsas and rrsps maxed is fantastic. Keep.it up!
Great to hear from you. Yes, Portugal is lovely and we hope to go back. We had a great time. Thanks for the kind words about our progress.
Saving for your vacation is a great goal. Previously, I never had a vacation fund until this year. It feels so satisfying being able to go on a vacation with having worry about how to pay for it once you’re back. It also make the vacation more enjoyable too.
I am starting to really like the idea of having a special fund for a specific activity.
Vacation funds are great…I mean…you gotta live right? Cheers.
Great job, Mark! The TFSA could be partly used in case of an emergency. I hold cash in my TFSA to play options with. Once I make some good gains with option trading – I then buy some growth stocks. Once the growth stocks go up – i take the gains and buy Reits to hold in my TFSA. The point is – my Tfsa holds some cash – that i can easily take out if needed for an emergency – And can put back in the following year after the emergency has been dealt with. (for those that do not play options – holding cash in a Tfsa might not be a good idea.)
The TFSA could but I would have have cash on hand in an emergency, not sell assets. I also hold REITs in my TFSA. I personally look at the TFSA as a retirement account so cash is not a good idea there. Cheers.
Well done Mark.
I don’t like renting as you do not have control on how much the rent would increase year over year. In Metro Vancouver area, as the house price out of control, people have affordability problem no matter you are renting or owning if you do not own any property yet.
We got the money from selling our old house half month ago and paid a big part of the loan on the new house. Now we have quite a bit room in our heloc. I plan not to have an emergency fund any more but just invest away any money I have. The fact that we never really touched our emergency fund for past ten years proved that emergency fund for us was really only for emergency and emergency by definition, rarely happens. I feel for us, it should be pretty safe to have heloc as backup.
Not a huge fan of renting for a period of time but long-term I prefer not to do it.
Interesting you never had to dip into your emergency fund. I mean, that’s good, but it’s better to be lucky than good 🙂
I think it helps that we paid off our mortgage on our old house more than ten years ago. Once the mortgage was gone, we were able to have a high savings rate. Just like you, we are very uncomfortable with debt and also did our best to avoid any debt. The only debt we had after that and before buying the new house was a zero interest car loan. So basically the emergency fund is for the situation if both of us out of work. If one of us is unemployed, we can still manage with the help of EI and reduced cost. Normally, EI gives you enough time to locate next job. Fortunately, it never happened that both of us out of work.
I am in the process to build a portfolio that mainly holds dividends and generates income to prepare for retirement. Once it’s done, it will add another cushion for emergency situation. So I think I am covered pretty well for emergency.
Huge advantage when you’re debt free May. I really hope we can do that in the coming years. I mean, we could be debt free now if I got rid of all our non-reg. investments but I really don’t want to do that. It has taken us many years of investing to have a small non-reg. portfolio and I’d rather not pay capital gains now if I can avoid it – selling those assets.
Being debt-free gives you options with your income. I like your call in building an income portfolio for retirement. I’m biased – doing the same!
Good job Mark.
Everything accomplished but the mortgage stuff and you replaced that with savings for good reason. Is renting an option?
Your journey is a finely tuned machine…..you’re not giving us much to pick at!!!
Yeah, savings are now growing a bit without lump sum payments/double-up mortgage payments. I recall we continue to pay down the mortgage by an extra 20% with the increased payment privileges we have.
That’s good. The options for paying down mortgages are a lot different now than when I last had one back in early /mid 90’s.
I get it on the renting thing. May be in our future in our later age 70’s/80’s or as health dictates. We rented for a year about 5.5 years ago while we also had this place and were doing renos etc.
Congrats on your travel goal. It’s important to do fun stuff and not just get caught up in maximizing one’s personal finances. My wife and I need to travel more, especially internationally. Do you do your own trip planning? Tom
Thanks Tom. We agree. Saving and no fun makes Mark a boring guy. I’m thinking a trip to Chile might be fun for our next trip.