2019 Financial Goals – July Update

2019 Financial Goals – July Update

“The budget is not just a collection of numbers, but an expression of our values and aspirations.” – Jack Lew, American Public Servant.

Oh for sure.

And since our April 2019 goals update, our values have been centered around our new condo and all the big spending that goes with a new home…  It hasn’t been a frugal few months when it comes to our financial goals – read on.

Do you have typical financial goals?

You might recall, I wrote that many personal finance bloggers among others typically write about their goals in this much detail:

  1. Build an emergency fund.
  2. Save for retirement.
  3. Get out of debt.

I believe generic plans lead to generic, underwhelming results.

Instead, you have to have a detailed plan.

For example, on the subject of our emergency fund, we were specific in terms of how much we wanted to keep.

When it comes to saving for our retirement, we focus on investing in two accounts:  maxing out our contributions to our Tax Free Savings Accounts (TFSAs) and then establishing monthly contributions throughout the year for our Registered Retirement Savings Plans (RRSPs) – in hopes of maxing out those accounts.  We know exactly what we contribute to these accounts every month and every year.

Our TFSAs are maxed out of contribution room for 2019 ($12,000 was invested in January 2019).

My RRSP contribution room is reduced every year because I contribute to a workplace defined benefit pension plan.  My 2019 RRSP contribution room (~$6,000) will be maxed out later this year.  My wife’s RRSP contribution room should be maxed out in the coming year or so.

Ultimately, we believe this is a better way to budget.  Essentially, making any savings for investment purposes automatic and spending what is leftover.

…and like I mentioned above…we have been spending…up go the goals in smoke!

2019 Financial Goals Progress

To recap, here are our financial goals:

  1. Save for our 2020 TFSAs. This implies we’re going to try and save $12,000 this year – assuming contribution room is $6k per person another year from now.
  2. Completing the My Own Advisor $5 daily money challenge. You’ll read about my update below.
  3. Reduce our mortgage by $20,000 by the end of 2019.
  4. Max out my wife’s RRSP. This is an incredibly aggressive goal beyond the above.

Let’s review where we are year to date:

Save for our 2020 TFSAs.  In April I mentioned we managed to save up $1,200 or just 10% of our eventual goal.  Well, we’re not much further ahead.  As of July, we have $4,800 saved up.  You’ll read more about our impact on this goal below; moving and getting acclimatized in our new place has been very expensive.

Completing the My Own Advisor $5 daily money challenge.  So far, so good since this money challenge has been automated since January and with just $5, I don’t miss the money coming out of the chequing account.  With six months down and six months to go, I’m very confident we’ll be able to save ~ $1,820 this year by saving just $5 per day.

Reduce our mortgage by $20,000 by the end of 2019.  Until our former house closed, we were paying a mortgage to the tune of $820 via bi-weekly accelerated payments.  When we took possession of our new condo in mid-June, it was not registered in our name.  That means upon time of possession, we were essentially renting our unit from the condo builder as part of an interim close.  Our “rent” payment for July and August (to cover the condo builder’s borrowing costs, to cover our condo fees until the condo is registered in our name) was ~ $2,150.  While this was anticipated to occur, we weren’t really fully prepared to hand over nearly $4,400 in cash recently among other new condo purchases.  There have been new light fixtures to install, new furniture to purchase (since the older, former house furniture did not fit in the condo space).  There have been new window treatments to order, a new BBQ to buy (not essential but we wanted one), and moving costs to cover.  All told, these expenses tally into the thousands.

Although we budgeted a healthy amount to cover all these expenses, it hasn’t been enough.  We’ve unfortunately had to dip into some of the savings set aside for our TFSAs in another 5 months – essentially putting any automatic savings for TFSA investment purposes on hold for now.

This is not where we wanted to be.  We’ve always been so good with our savings and investment goals over the years.  But certainly this year has been different than any other year.  I feel like we’re failing miserably.

Max out my wife’s RRSP.  This was always going to be incredibly aggressive goal beyond the above.  My wife has just a bit more than $20,000 left as part of her RRSP contribution room.  Given where we are with financial goal #1 above – I see little hope in how we can realize this goal this year.  I think 2020 is more realistic.  This goal will have to wait until then…

What now?

With new fixtures, new furniture, new window treatments and more purchased, I just might have the highest credit card statements I’ve ever had in July and August.  That’s not a good thing!

Moving and getting a new place is VERY expensive.  While they may be an asset, condos and houses are a major expense.

To be frank, if we didn’t have the proceeds from the house sale to draw from, for most of these expenses, I would be significantly more stressed.

We’ll be completing the final closing on the condo (and firming up the mortgage documents that go with it as part of a ported mortgage) in the coming month or so.  All told, we’ll have a small six-figure mortgage remaining to become fully debt-free and a home equity line of credit available to us – although we don’t want to use the latter as an automatic teller.

With 5 months to go, we’ve liquidated a good portion of our TFSA savings for 2020 and made little progress on striving to max out my wife’s RRSP completely out of contribution room, although her monthly RRSP contributions continue to occur at least.

We’ve got some work to do on these financial goals.  Stay tuned for a fall update to see how we might be able to recover.

Thoughts?  Will we get back on track this summer?  Do you think we have a shot at getting our TFSA savings in order for 2020?

My name is Mark Seed - the founder, editor and owner of My Own Advisor. As my own DIY financial advisor, I'm looking to start semi-retirement soon, sooner than most. Find out how, what I did, and what you can learn to tailor your own financial independence path. Join the newsletter read by thousands each day, always FREE.

36 Responses to "2019 Financial Goals – July Update"

  1. Hey Mark,
    Moving is stressful and expensive. Unexpected expenses or misjudged expenses happen. It’s life. Don’t beat yourself up for digressing temporarily. You’ll get on track next year. That said, I can’t imagine spending 600k+ for a home in retirement. I guess living in small town Manitoba has it’s benefits when you only have to spend 200-300k for a decent home. But there’s always home maintenance to eat away at investing funds. I decided to revamp my deck to make it maintenance free…I’m too lazy to keep staining.
    I deserve it. So do you. We worked hard to save money so we can enjoy life.
    Don’t sweat the small stuff!!

  2. what a timely update. We went through this recently too with a new main floor reno (read new flooring, kitchen, family room, powder room) and let’s throw in the need for a new garage door (trades couldn’t access it for the supplies) and the water heater (6.5 years old) needed replacing (thankfully it was under warranty but not the labour)…….We had savings for this which I took advantage of Tangerine’s bonus interest promotion for 4 months this spring and put this in the TFSA until it was needed. What do you know….TFSA’s are now underfunded +++ but I think for a very good cause. We like you are big savers and this reno was a year in the making. It will more than pay for itself when we move which won’t be for decades…. We will figure out our budget this fall and get back on the savings track. It will likely take many years to get caught up with this underfunded TFSA situation for both our accounts but totally worth it. Its not every day that we invest in ourselves and our quality of life to this extent. I think you are right that it will all be worth it for you too, it just takes some financial readjustments that I view as totally temporary. 🙂

    1. Boy, renos are expensive aren’t they??

      I recall in our old house/former home, we replaced the roof; installed a natural gas generator; put in some window wells (not originally installed by builder?); replaced our HRV, fridge, hot water tank and more. Not cheap. So, while people think homes might be a great asset they are certainly an expense.

      Like you Sue, we’ll figure out our savings and investing game plan in a few months. Life happens.

      Good luck on your renos!

  3. Mark,
    Re: “Save for our 2020 TFSAs”

    I have a savings account which I use solely for irregular expenses, ie; home and car insurances, property tax, annual vacations, birthdays, Christmas, etc. I have my TFSA in there as well. The account is funded monthly by an amount equal to 1/12th of my annual expected irregular expenses. I keep a buffer in there for annual increases. Bottom line, the account gives me peace of mind knowing I’m covered for when those payments are due like the $6,000 TFSA in January.

    1. We have a savings account for short-term expenses (was for condo); an emergency fund (that we don’t usually touch unless it’s an emergency – moving was planned so not an emergency) and after the savings and emergency fund that’s about it – everything else is invested. I use my TFSA as an investing account, definitely not a savings account for me.

      I probably need to increase our cash savings and/or be a better planner when this move costs > $20k!

      1. Mark, I’m surprised you still have a mortgage after downsizing into a condo. Regardless, your mortgage must be greatly reduced now from the balance you had on the house.

        1. You would think Bernie! High-level math since I don’t share broadly (yet) our net worth nor what we pay for stuff including houses:

          2010 house purchase was ~ $490k.
          2019 house sale was ~ $626k.
          2017 pre-construction condo purchase – let’s say >$600k not including upgrades.

          We had a small mortgage for house, we basically have a similar mortgage for condo. Therefore, the difference accounts for condo upgrades and the condo purchase price. I might put a blogpost together on those costs are some point but I already share tons of information on this site so I don’t want too much information “out there”.

          You wouldn’t believe the prices of houses and condos in the city of Ottawa now.

          As an fyi – there is a condo on our floor that sold for > $1 M. It’s right around the corner from us. Wild.

          1. That doesn’t surprise me at all, it’s just another way us Baby Boomers have screwed up the housing market, especially in Ontario. Back when we bought 3 years ago Condos were substantially cheaper than houses due to the fees, and the fact you didn’t get much of a back yard. Most were row houses. They made great starter homes, live in one for 10 years sell on to the next new family and upgrade to the dream house. Now fast forward 30 years and the reverse is true

            I have several friends who are looking to downsize but not sure they can afford it. In the Kitchener Waterloo area single family dwelling runs in the mid 500s while a 3 bedroom condo runs in the 750,000 range! In other words to downsize means taking on a mortgage. It’s the same in cottage country, baby boomers are pushing the prices through the roof. I expect that to change as the boomers hit retirement home age (usually mid 70s)

            1. Yes, you have 🙂

              You haven’t created good policies to help manage the inventory for Gen X. Me 🙂
              You haven’t created good infrastructure to help manage city growth.
              And the list goes on…

              I’m kidding. Kinda.

              Most newer condos (not necessarily new) in the city (Ottawa) for a unit our size (1,200 sq. ft.) are easily north of $600k or closer to $800k in the better areas if they have been updated at all. Add building features like yoga studios, commercial on ground floor, etc. and larger units approaching 1,300 sq. ft. are approaching $1 M.

              We hope to be lucky because with a pension from work and our portfolio, a portfolio that should pay dividends alone to cover condo fees + City of Ottawa property taxes + condo utilities – we’ll be just fine in 5 years. Other folks, I have no idea….


      2. Mark, you seem to have everything in place to be successful and retire early. Life happens and you deal with it as it comes along. I just retired a year ago and live off my dividends and never had a mortgage. Never had an emergency fund either. for us what worked really well was a line of credit. we negotiated our first one in 1987 at prime interest rate and had one on every house we owned since. this gives you all the flexibility you need. each month put any leftover monies toward the line of credit, and when emergencies or other expenses happen borrow the money again. this way all you have is always invested and doesn’t sit idle in an emergency fund. this only works for people that are disciplined, which sounds like you are. wish you continued success.

        1. Thanks DivInvestor! I was on your site recently – nice story about living off dividends. Something my wife and I aspire to, to a degree!

          Congrats on the retirement (and never having a mortgage). I suspect my wife and I would be “retired” now (age 45) if we didn’t want to own our (new) condo eventually.

          No emergency fund eh? I don’t know if I could do that. I like having cash on hand if we need something or something goes amiss.

          We are pretty disciplined but you definitely can’t plan for everything. Actually, I just wrote about that and our move.

          Curious, what stocks do you invest in (beyond CDN banks)? I read that on your site and curious if you invest in the U.S. or international stocks as well.


  4. Just keep your eyes on the road and you’ll get where you want to be. Not many have as clear objectives and work to achieve them all.
    Nice to be past the planning and goal setting stage. Our financial goals are much simpler, just to monitor the income and it’s growth. The budgets are not an issue either, and besides we blew our expenses anyway by buying a new car.

    1. Thanks cannew.

      The plan is in place, we just need to execute on it for the coming years. I believe the $1 M portfolio is actually within reach by age 50.

      Nothing wrong with buying a new car if you can afford it. Life is for the living after all. It’s rather precious.

  5. Thanks for this post. I will be going throuh the same process next year except that I am already retired, so not saving. Seeing you write about the costs involved set me to thinking about costs to anticipate. I haven’t moved in 30 years so it will be an eye opener. I am looking forward to less maintenance and hoping I don’t encounter the issues Mary-Lynn is having. Your posts are always enlightening. Thank you.

    1. Thanks very much Jan. Stay tuned for a future post where I break down the costs of moving and what we’ve encountered – including the mental-side of change.


  6. Not that I want to laugh at your expense, but this is so funny because everyone goes through the same thing with a major life change. Selling/buying houses is one of them. I am going through the same situation but in reverse. I sold the big house and purchased a condo. I cried when I moved in because I knew it was a mistake. After the sudden death of my husband in a motorcycle accident all my friends offered their advice saying “sell the big house and move to a condo” it will be so much better with less maintenance. Big mistake for me. Although not a typical situation, I am now surrounded by a gossip pit and a terrible condo board. Those things, that never show up on a balance sheet, can make your life miserable. The cost of being unhappy is never factored in that same balance sheet but have tremendous effects on your mental and physical health. The cost of a new house and its furnishings, upgrades etc… is not to be neglected but rather put into perspective. Why have you worked so hard in the first place to put that money aside? To enjoy your life.
    So go ahead and enjoy that new BBQ. The new furniture is like getting a do over. And as another subscriber said “Don’t sweat the small stuff” It is insignificant in the scheme of things. Congratulations on your new life adventure!

    1. Mary-Lynn, perspective is important and it’s just money.

      Very sorry to hear of your loss so from my perspective, my problems are extremely minor and trivial.

      “To enjoy your life”. I will get that BBQ.

      Please do take care.

    2. I am now surrounded by a gossip pit and a terrible condo board.

      That doesn’t surprise me, I’ve often wondered how people are going to adjust to the loss of freedom that comes with buying a condo. I suspect the newspapers are going to be filled with stories like this.

  7. Hi, Mark, I have been there, done that. Last year we spent a lot extra due to moving to a new home. New furniture, home theater, new furnace/water heater/air conditioning plus some not so major expenses. This year we are repeating that experience again with the purchase of our new Nissan Leaf.

    Sometimes I could not help to think about if I did not spend these money but invest them, how much extra investment income I could have. But I believe those are money well spent. My kids like their new furniture in their new bedroom. The family spend lots of good time in home theater. With the new furnace/air conditioning the house is much more comfortable in cold/hot days. We also have unlimited hot water. New EV not only saves us time by being able to use HOV lanes but also provides better driving experience.

    After all, we are still living within our means and I think it’s completely OK to delay that FI day a little bit. We want to be FI so that we can enjoy life. We don’t want to deprive the enjoyment of our life just in order to be FI. I am sure it’s the same with you.

    1. Congrats on the new, upcoming EV. That sounds great. We might get one eventually.

      Ya, we continue to largely live within our means. It’s not like we are borrowing ridiculous amounts of money but I really wanted to have our savings ready to go for 2020 TFSAs early this year – and not worry about scrambling trying to find savings in early 2020. Ah well, we’ll see. Maybe the credit card bills won’t be as bad as I am forecasting? We can likely cut back on a few things this summer and maybe by October or November, put some of that $4,800 back and get on track again.

      Thanks for your comment!

  8. Great recap of your situation.
    In the whole scheme of things and long term picture your extra expenses and slight setback on planned savings is minor stuff. I say don’t sweat it. Maybe you’re trying to do too much financially. If I had been anywhere near as focused financially as you we’d have at least double what we do in assets and income!

    Live and enjoy your new place. Regroup and carry on as you were after the dust settles.

    1. Yes, long-term for sure. Blinds should be an expense every 15-20 years? New sectional – likely every 10 years. New BBQ – every 8-10 years. So, these are major capital expenses we shouldn’t have for many years to come.

      Definitely feels we’re “trying to do it all” (max out accounts, kill debt, etc.) but maybe a short break is due.

      Will regroup after a few months of dust settles!

      1. Absoutely right on some of those costs. Like May we’ve been there done that. Spent $175K more than planned here on renos, and trust me the list goes on and on. Same as the “unplanned” exterior work we just had done and some more stuff to come. I can’t get stressed by it. That’s life!

        You’ve done fantastic on your progress to your goals. It may not feel like it to you but I think this is a nothing burger. You’re living the dream and a little setback is a great character builder that will make you appreciate getting to where you want all that much more. Absolutely right taking a little more time to FI is completely ok. Take that break and then soldier on! You’ll probably still get there faster than you think.
        Best wishes!!

        1. Life happens, what can you say?

          I think overall we’ve done well and have saved well. Our portfolio by age 50 (5 years for me) is within reach of the $1 M goal and if no debt goes with that age target – we will have done well I think.

          Setbacks are fine but I’m wired to continually improve. Maybe I’m an overachiever to a degree. I dunno. I just want options for my life and I get a kick out of seeing financial progress. Onwards and upwards, with patience 🙂

          1. Yes. Well for sure.
            “wired to continually improve”….I get it. I didn’t drive into to the city to bust my guts out at the track this morning in the heat without having a bit of that myself. lol
            Having options is always good. I get that too. Patience is a virtue.

          1. Oh I can so relate, it cost us a fortune when we moved back into old place. It was rented for 10 years and of course we wanted to gut it and redo how we wanted it. My oh my talk about hindsite would have done the renos completely different now! But water under the bridge!


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