2019 Financial Goals – October Update

2019 Financial Goals – October Update

When it is obvious that the goals cannot be reached, don’t adjust the goals, adjust the action steps. – Confucius

And so we did…adjust. We needed to realize any 2019 financial goals. 

Since our last goals update, that centered on spending tons of cash throughout the summer in support of getting established in our new condo, we adjusted our steps.  We have since hunkered down. We’re on an improved course…

Thank goodness.  It was an unsustainable spending pace.

New condo furnishings. New condo window treatments. New condo light fixtures.

Thankfully, no new patio furniture needed nor wanted at this time. 

Good thing, otherwise, more expenses would totally squash all our 2019 goals.

2019 financial goals

Here is a recap of our goals for this year and why:

1. Save for our 2020 TFSAs. This implies we’re going to try and save $12,000 this year in after-tax dollars for those contributions that open up in just over two months.  Our TFSA contributions for 2019 are already maxed out with some of these favourite stocks of mine.  Maxing out our TFSAs (similar to the Roth IRA in the U.S.) will provide some great tax-free income in semi-retirement.
2. Completing the My Own Advisor $5 daily money challenge. I totally made up this money challenge for 2019, just for fun, but the results have been surprising.  My money challenge was designed to help fund future international travel. 
3. Reduce our mortgage by $20,000 by the end of 2019.  Why?  Because debt is an anchor for us and by clearing our mortgage debt we’ll have significantly more cashflow to do other things.
4. Max out my wife’s RRSP. Why? My RRSP is pretty much out of contribution room.  We also believe in maxing out any available tax-deferred investment accounts before taxable investing – although we do have a non-registered account with Canadian dividend paying stocks.  Also, with my RRSP room pretty much maxed out for the 2019 tax year (due to my “big bond” defined benefit pension plan) my wife has at least $20,000 in RRSP contribution room left.   We would like nothing more than to have all our registered accounts (x2 TFSA and also x2 RRSP) full of contribution room within the next year.

Where are we at? 

1. Save for our 2020 TFSAs.  In April I mentioned we managed to save up $1,200 or just 10% of our eventual goal.  As of July, we had $4,800 saved up.  Now, as of October, we have $6,900 saved. With just over two months to go, with many condo expenses done, I hope we can find some $5,000 to fund both TFSA accounts as of January 1, 2020. A public financial safety reminder to please consider using your TFSA beyond a savings account!!

There are many great things you can do with your Tax Free Savings Account here.

2. Completing the My Own Advisor $5 daily money challenge.  So far, so good.  This goal was almost a layup though since we decided to automate the money transfers since January.  With just $5 going out, or $35 per week automated to savings we haven’t missed the money at all.  Amazingly, because of this simple automation hack, we’ve got almost $1,500 saved up so far this year.

Have you ever tried to automate just $5 per day?  

We hope to use this money to fund some vacations in 2020. 

This was our view from our Barbados condo using similar automatic savings last year:

3. Reduce our mortgage by $20,000 by the end of 2019.  Until our former house closed in June this past year, 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 to 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 almost $2,200 per month until the condo formally closed in late-August. While this was likely to occur, we weren’t really fully prepared to hand over nearly $4,400 in cash, quickly, among higher than anticipated new condo purchases.  Lesson learned:  be prepared for the unplanned. 

On top of the rent, we had the aforementioned new furniture to buy (since the older, former house furniture did not fit in the condo space), new window treatments to pay for, and new light fixtures.  All expenses came in higher than expected.  Learned learned reminder #2:  moving and getting established in a new home/condo is more expensive than you think.

As a result of our spending, our planned savings program (for the TFSAs in particular) took a major hit.  In my head, these expenses felt like this:

Fortunately, we have since recouped some of those outlays by cutting back expenses in some other areas.  Our downsized move to the condo has also started to yield some benefits:

• Using one less car (we only have one car now) has reduced our transportation expenses by $300 per month.
• Less house means less monthly utility charges and less insurance charges overall. A savings of another $250 per month.

Reducing unnecessary waste, ensuring your expenses align with your values, are good reasons to downsize.

Year to date, we have not reduced our mortgage anywhere near $20,000. It’s been closer to $10,000 on the mortgage principle so far or about $1,000 per month.  Unless something magical happens, we will not realize this goal this year.

*Sigh*

Life will go on.

Besides….this is definitive, easy answer to the mortgage paydown vs. investing debate.

That brings me to goal #4.

4. 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 were with financial goal #1 above earlier this year – there was little hope on this one.  Based on steady monthly contributions going-forward however we might be in a position to achieve this goal in mid-2020.  

Missing goals means you’re taking chances and life happens

We shouldn’t beat ourselves up.  It’s been a big year of change and lots of expenses to tackle. 

With just over two months to go, we’ve finally got ourselves organized and settled into the condo.  It’s starting to feel like home even though some travel pictures need to go up on the wall still. A winter project…

On the positives, we’ve made some progress on my wife’s RRSP contribution room and we have some travel funds set aside for 2020.  The mortgage debt will be killed with time.

Take the good with the bad.  Move along.

I’ll let you know how we finish the year.

What financial goals did you set for yourself in 2019?   What do you make of some of our missed goals?  Let me know in a comment.  I read every one.