I sort of messed up my format for posting and discussing my goals for 2016… I started with 2 overall sort of goals that sort of encompass many categories of goals… and were related to others… which then of course meant that I didn’t categorize my goals like I did for 2015… So, now that I want to post about my 4 financial goals for 2016, I guess I’ll just continue with my goal numbering that I did in my last two posts. (I think this is why people do blog post planning and such… )
My first financial goal of 2015 was to make and stick to a budget, and while I could lump it in here with the financial goals for 2016, I already discussed this with the habits that I am working on, so I’m going to leave it as part of that.
Goal #3 – Emergency Fund at $10,000
This one is sort of left over from last year… I had originally thought I’d get our emergency fund up to $10,000 last year, but I had is as a sort of bonus stretch goal for the year. With it currently sitting at $2500, we need to save an additional $7500 this year to get it up to the $10,000 goal. Totally doable… I think… Unfortunately, I may have to hit up the emergency fund for some expenses in the next month… which I will discuss in another post…
Goal #4 – Save for Planned Spending
2016 is already looking like a very busy year. We have lots of travel planned, big ideas for home improvements, along with some required maintenance, and are considering getting a dog… We don’t want to go in to debt for any of these things if we can avoid it, so that means saving up… lots! So, in a format that is loosely based of Kate from Goodnight Debt‘s savings goals (baby, middle, thing 1, thing 2, etc…) I have put together this list:
- Travel #1: $2500
- Travel #2: $8000
- Home Reno #1: $2500
- Home Reno #2: $5000
- Dog Fund: $1000
- Travel #3: $2000
- Home Reno #3: $3000
- Travel #4: $1500
- Home Reno #4: $2500
- Travel #5: $5000
- Home Reno #5: $3000
- Other Savings Goal: $16,000
- Home Reno #6: $18,000
Yup, that’s a lot of savings… if you add it up, it totals $70,000. That is way more than we could realistically save in a year… But here are a couple things that I should mention… I have made these estimates based on what I think worst case costs would be… so some of them will not require the full amount saved, which means that the extra can be moved to the next goal… And, to be fair, #1 is already done based on the travel fund leftovers from 2015, and #2 (honeymoon) is partially covered by savings and gifts from last year… So, it might not be that bad… And I know that the last two are not going to happen in 2016, but sometimes you just have to dream big, right?
Goal #5 – Net Worth & Retirement Savings
After reading so many personal finance blogs where they are tracking their net worth, I figure it is time to jump on that bandwagon and start as well. Unfortunately (or maybe this is a good thing?) my finances are completely intertwined with my husband’s finances (it’s all “our” money), so I will not be sharing numbers on here anymore (well other than my savings up there in goal #4), just graphs and percentages. So for this goal, I have taken some inspiration from Ali at Anything You Want Blog and her awesome graphs… So here is my version:
The graph probably needs a bit of explanation…
What I am including in our net worth calculation:
- RRSP: (registered retirement savings plan – for those that aren’t familiar with the Canadian term) includes both my RRSP and my husband’s, and it includes both cash and investments.
- TFSA: (tax free savings account – for non-Canadians) also includes both mine and my husband’s, and is also both cash and investments.
- Taxable Investments: investments that are not held in either an RRSP or a TFSA. (It would probably make sense to move these in to an RRSP or TFSA in the future, but for now we are leaving them as is.)
- Cash Savings: this includes all our money that is not in a registered account… so this value is likely to fluctuate a lot with planned spending and the like…
What is not included in our net worth:
- assets such as our cars and our house
- our mortgage
I know there are many ways to calculate net worth, so this is how I am doing it for us.
Generally speaking, I would like us to increase our net worth by about 12%. With all the spending planned for this year (see Goal #4 above), I’m trying to be realistic… Most of this increase will come with the automatic contributions to our RRSPs. Currently, our RRSPs account for about 73% of our net worth, and that percentage won’t change much, but the actual value will increase. I would like to move some of our long term savings (like the emergency fund) to our TFSAs for safe keeping (and to hopefully make better returns tax-free), so that should increase in both value and percentage. As I mentioned a bit above, for now I am leaving our taxable investments alone… I expect them to go up a bit in value, but probably remain at about 2% of our total net worth. And the cash part… well… spend, spend, spend… so that will likely decrease in both value and percentage…
Goal #6 – Mortgage Renewal & Account Consolidation
This goal may not be following the “SMART” goals, but our mortgage is up for renewal in the fall, so I want to spend some time going over the options. I’m not happy with our current mortgage provider, so I want to move somewhere else, and in doing so, I’m going to move and consolidate some of our accounts. I would like to streamline how our money is distributed in our accounts and I would also like to move away from my current bank if I can. This will take some research and some time to sort out. This month is already almost half done, but I’ll put together a more specific plan to make this goal “SMARTer” and post about it later.
What are your financial goals for 2016?