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Saturday, March 25, 2017

New Year’s Resolutions

Posted by Dave on January 5, 2010

I’d like to think I grew as a person last year – I definitely think I understand myself, my money and have a clear (for now) idea of an end goal and how I want to get there.

There are several goals that I would like to achieve over the next year in order to continue the process I started, they are as follows – listed from what I see as the most difficult and moving to the easiest (and perhaps least financially responsible):

1.) Eat mostly (if at all possible) “real” food

I’m not sure if I’m the only one, maybe I’m having a pre-midlife crisis(having just turned 30),  but I have gotten hypersensitive about ingredients in my food.  Looking at package listings, there are things that I can’t even pronounce that I have been putting into my body, in some cases for years.  Although the chemicals and preservatives may have been approved by Health Canada or the FDA in the US, I’m thinking that for the most part this “stuff” really isn’t adding to the betterment of my health.  Having gotten more into cooking and baking over the past year, I know what should go into such things as a loaf of bread (generally around 5 ingredients, one of which is water), but generally a loaf of bread from the grocery store has upwards of 15 to 20 different items going into it, which to me is kind of scary.  In general, I’m hoping to take on the mindset that if a food isn’t going to build my health in some way, I probably don’t need to eat it and carry on from there.

Impact on my life: Better health

Impact on finances: Most food made from scratch (in my experience) can be made significantly cheaper and definitely healthier then its processed counterpart – it may not be a significant gain on my bottom line, but coupled with other added benefits, it’s probably worth the extra time to make it myself.

2.) Pay down my mortgage:

This task is essentially automated and doesn’t require a lot of effort on my part, other then ensuring there is enough money in my account to cover the aggressive payback schedule I have set up (paying the entire balance off in 5 years).

I would love to not have the approximately $150,000 debt I have right now.  Once the house is paid off, free cash can go to investing, which is probably going to be as equally boring,  but much more satisfying – watching wealth grow rather then debt decrease.

Impact on my life: Being closer to financial freedom

Impact on finances: In the long-run, paying back this debt will have a very positive impact on my finances, for the next few years it may seem negative as it won’t seem like I’m getting anywhere.

3.) Bolster Emergency Fund:

My spouse and I have separate finances.  We split the bills evenly, and each have our own goals every month.  My goal is to hammer away at our mortgage, while my spouse has taken on the job of creating a robust savings account.  With our low monthly fixed bills, we are hoping to have approximately 6-8 months of expenses covered in savings by the end of this year.

Impact on my life: Feeling of security

Impact on finances: Positive – having liquid assets available when unforeseen circumstances occur is never a bad thing, and having savings would allow a much more aggressive attack on debt and in the future savings.

4.) Save for a vacation to happen early 2011:

This goal should be the easiest of all those listed, given it won’t take very much money to achieve, however with most of the money coming in being allocated towards debt and savings – it may be tricky to scrape together a couple of thousand dollars for an unnecessary trip.  I will freely acknowledge that a trip is wasteful – for the most part I could achieve the same end-goal of a trip someplace warm by staying at home and making blender drinks for myself for a week, but in the middle of February and March I love nothing more then getting away to a beach for a week or so to get away from winter.

Impact on life: Minimal, a nice break, but nothing major.

Impact on finances: Negative – essentially flushing money away.

Those are my four main goals for 2010 – how about you?  Do you have anything major planned for the year?  Something that goes against your main goal (like my trip) that you’re going to do anyway?

Comments

9 Responses to “New Year’s Resolutions”
  1. Why do you have separate finances for you and your wife?

    Ours has always been “our money” with everything set up as a “joint account” unless tax advantages come into play such as RRSP investments.

  2. Dave says:

    @ Canadian Money:

    We’ve basically just rolled over our finances from when we were dating and living together to being married and owning a house. We are both more comforable having things seperate and it seems to work for us.

    I think if we had kids it would be different, because it would be more difficult to split up expenses, but for the most part we basically drew a line down the middle of all expenses, all of which are shared between the two of us and whatever is left after our debt repayment or savings goals is money that we can each use for things like hobbies, shopping, etc. I think we both like to have our own money rather then “our” money.

  3. Andy says:

    My goal is food related as well. Me and the wife spend about $300/month eating out. It seems like a lot when you look at the budget, but not when you’re actually doing it.

    However, I’ve decided I’d rather spend that money elsewhere.

    As for the trips they’re cheaper than the alternative for me: Divorce! ;) So a wise investment I say!!

  4. Darryl says:

    Interesting comment on the trip Dave. I have to say I disagree with you about the money being flushed away – though I get your point. Spending on a trip is essentially spending on an experience, there is no tangible asset, or belonging at the end of it all (unless you cound photos). That said, my mental health is important to me, seeing more of the world is also important to me since not everyone out there enjoys what we have, and we don’t have what others enjoy. I consider it an education (with no measurable ROI) and am ok with spending on a trip. My wife and I are taking our children on a 6 week trip to France in the late summer/fall. We’re looking forward to it as an opportunity to recharge as a family and for our kids to see how other people make their way in the world. Well worth it since we’re not borrowing to go and have our other financial accounts in order.

  5. Jon Snow says:

    Resolutions for 2010:

    1) Continue to Live Below Our Means

    2) DO NOT buy a house, be content with condo. Prices in insane Vancouver are sure to come down one day… right?

    3) Learn more about investing. GIC’s just aren’t cutting it. I’m envious of the returns I’m seeing from some of you on this blog.

    We managed to increase our net worth by 100k in 2009, which was a 14% increase. If I can improve the performance of my investments, I think I can better this in 2010.

    Also, I generally take a trip to Mexico once a year – the Canadian winter just beats me to a pulp, and my job means I’m out in the elements 8+ hours per day. Fortunately, my parents own a condo in the Baja… so other than the cost of the flight, its a pretty cheap holiday.

    Another thing, this just might be my favorite blog… its the first one I visit when I get home from a hard day’s work….

  6. Dave says:

    @ Andy:

    My restaurant spending tends to go up when meal planning stops – the better the week’s meals are planned the cheaper food costs the house.

    I really like vacations away and so does my spouse – we’d both be okay with not going, but would prefer to be someplace warm next winter.

    @ Darryl:

    I guess in the context of everyday life a breather in another country (warmer) is always welcome in the middle of February. In the long run though, I would think that financial freedom would have a significantly higher impact on my mental health then a week away – I am essentially trading what could be several weeks or more of early retirement for a week or so of relaxation.

    @ Jon Snow

    I don’t know much about Vancouver real estate, but I’ll cross my fingers for you that the prices will come down:)

    Have fun learning about investing – there are a ton of good resources online that I have been reading lately. I have about 5 years to learn more about how to get where I want to be investing until I’m essentially throwing myself into the market, so I’m slowly learning more and more.

    I would agree that there are better places to be then GICs, but it all depends on your risk profile.

    Thanks for the comment – hopefully I’m adding something positive to Tim’s site!

  7. Robert says:

    @ Jon Snow

    If you want to learn about investing and get experience outside of GICs, I’d suggest this is a great year to do it. Last year was a swift recovery in the market, but it has further to go. Chances are, almost anything you buy will go up. I would suggest starting with a mutual fund (for a portion of your money) and get some experience with the up-and-down of the market.

    It might be a good idea to find an advisor (ask everyone you know if they can recommend one they trust) and commit only a specific amount of money. The advisor should be able to answer all your question and explain how investing works, before-hand and as you experience it. (If you want any more free advice, contact me.)

  8. Dave says:

    @ Jon Snow/Robert:

    If you’re looking for an advisor, I would look for an independent advisor (fee for service/ fee-only financial advisor). I would much rather have an independent look at my investments then someone who is getting paid by the companies whose products they are selling.

  9. Dave,

    You are quite right in saying that as you get closer to retirement paying off your home makes a lot of sense.

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