I like to review our finances at the end of the year so that I can update our goals and objectives and calculate our net worth.
There was a lot going on in 2012. Here’s a quick recap:
- Owed additional taxes for the first time in my life which resulted in a $2,000 bill.
- Set up a corporation for my online business which cost me about $1,000 for the lawyer fees.
- Bought out my car lease for $10,000.
- Completed fence and landscaping at new house for $6,000.
Our daily living expenses went up a bit this year because we had another baby in June and our oldest daughter started preschool and dance in September.
- Paid extra $800 a month on mortgage
- Made $5,000 lump sum payment on mortgage
- Made $5,000 contribution to RRSP
- Saved $4,200 in TFSA
- Saved $2,400 in RESP
- Saved $7,800 in high interest savings account
Related: Our Fast Track To Financial Freedom
Our net worth went up 39 percent year-over-year, mainly due to an increased savings rate and an aggressive mortgage repayment plan. Here’s a look at the numbers:
Total Assets – $548,821
- Chequing Account – $1,500
- Savings Account – $8,000
- RRSP – $53,582
- Defined Benefit Pension – $51,698
- TFSA – $4,350
- RESP – $4,690
- Principal Residence – $425,000
Total Liabilities – $290,519
- Principal Residence Mortgage – $290,519
Net Worth – $258,301
Looking Ahead To 2013
I’m happy with the progress we’ve made this year and looking ahead to 2013 I’m aiming for another 35 to 40 percent net worth increase. That will put us around the $360,000 mark.
We’ll do this by continuing to be aggressive with our mortgage pay down. I’ve increased our monthly mortgage payment by another $200 so we’re now adding an extra $1,000 a month above our regular payment.
I’m also conscious of the fact that three-quarters of our net worth is tied up in real estate. With the housing market softening, our net worth could take a serious blow in the next year or two.
Since we won’t have any big ticket expenses to worry about next year, we’ll be able to increase the amount that we’re saving. Here’s how we’ll do it:
- RRSP – $5,000
- TFSA – $10,000
- RESP – $2,400
- High Interest Savings Account – $15,000
That allocation may change throughout the year, but for now I’m focused on building a bigger cash reserve. At the end of the year I might put that money to work by making another lump sum mortgage payment or by making a bigger RRSP contribution.
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Have you reviewed your finances yet this year? Will there be any big changes for 2013?