What gets measured gets managed. It’s true in business and it is definitely true in personal finance. Every year most of us at work write down our short term goals and objectives for the year. Some people really dislike the process, but I love it. How else do you know where you stand?
The same approach can work for you at home. From simple objectives of increasing your net worth, reducing your debt, or contributing to your RRSP and TFSA, to more specific goals of changing careers, building a house, or creating & sticking to a family budget, writing down your short term goals and regularly checking in on your progress is critical to your financial success.
My Short Term Goals
I write down my short term goals at the beginning of the year. This year, I wanted to do the following:
1. Create a family budget – With my wife staying at home full time looking after our first child, we would be adjusting to single income living by March. I’ve never done a budget before, but I felt this was the right time to start tracking our spending to ensure that we could make this transition as smoothly as possible.
- Progress – I found a family budget in Excel on Google Docs that I customized for our own situation. The first tab is the overview of the entire year where I can forecast income and expenses. Then I have set up individual tabs representing the current month that I’m in. So far, so good…and here’s the link to check out the budget tool for yourself
2. Max out my TFSA contribution – At the beginning of the year I will contribute $5k to my TFSA, which is held at TD Waterhouse. I have a specific strategy for this account, which I will get into at a later post.
- Progress – Completed, I contributed $5,000 into my TFSA account in March.
3. Maximize Rewards Points – I have always been a big fan of collecting Air Miles rewards, but I wanted to find out if I was truly maximizing my dollars spent with the rewards I’ve been receiving. Turns out I wasn’t, so after careful research I chose the PC MasterCard, which offers 1000 points for every $100 spent. 20,000 points can be redeemed for $20 in free groceries.
- Progress – Completed. I use PC MasterCard to pay bills online and for day-to-day purchases, and still use my Air Miles AMEX when we go shopping at Costco.
4. Save $1,000/month – This is part of an intermediate goal of upgrading our house in the near future.
- Progress – this varies from month-to-month, but so far I’ve consistently saved at least $600/month, and hopefully by the end of the year I can get this up to $1000/month
5. Increase Net Worth by $50k – This is basically the culmination of the other 4 goals. With my TFSA contributions, pension contributions, dividends, market growth, bi-weekly mortgage payments (and super-low interest rates), and increased savings rate, this should be achievable.
- Progress – Increased net worth by $27k as of July 31st
So there you have it. Nothing too crazy, but it looks like I’m on the right track to meet or exceed all of my short term goals for the year. That probably means I set them too low 🙂
I have an investment that is fully redeemable without penalty and pays an annual interest rate of 4.74%, much higher than the so-called investment savings accounts out there. It is my personal chequing account.
If I keep a minimum balance of $1,000 in the account, and limit myself to only 10 withdrawals a month, my monthly service charge of $3.95 is waived. I deposit this fee to my savings account so it actually compounds.
If 10 withdrawals don’t work for your own budget, there are many other places to find extra money that doesn’t involve the ubiquitous quitting smoking and laying off the lattes.
Related: Ways To Save Money
Here is a couple off the top of my head:
- Some stores, in their flyers, print coupons worth 20% to 50% off your purchases or give you a gift card when you spend over a certain amount. These go beyond plain coupon clipping and can give you substantial savings; so don’t be too proud to use them. Michael’s, HBC, Bed Bath & Beyond and Superstore are a few that do this.
- Many customers have reward cards that earn points. Air Miles is the big one, but you can earn points at other stores that you can redeem for gift cards or pay for your purchase. HBC and Shoppers Drug Mart are a couple that do this. I have been known to purchase a good portion of my Christmas list with points.
I’m sure if you think about it you can discover a lot of ways to find extra money that you can deposit into your financial freedom account and watch it grow.
They say if you fail to plan, you plan to fail. I’ve found meal planning to be one of the best money saving tips out there for young families trying to stretch their dollars.
Knowing in advance what you are going to eat for dinner can save you from many impulse visits to your favorite restaurant or fast food chain, as well as those last minute trips to the grocery store when you don’t have anything left in the cupboards.
Tips to Get Started With Meal Planning
Start the meal planning process by making a dinner list. I recommend matching the length of your list to your payday cycle. If you get paid weekly, plan for 7 dinners, if it’s bi-weekly plan for 14 dinners.
I get paid monthly and plan for 30 nightly meals (seriously). Put your list up on the fridge, this will help you remember to take the chicken out to defrost.
Take stock of what’s already in your fridge, freezer, and cupboards. From there, use your dinner list to make your shopping list.
I make a list for shopping at Costco (meat, dairy, vegetables, other staples), and Safeway (whatever else I require that doesn’t need to come in size XXL). For further money saving tips, try and hit Safeway on 15% off Tuesday (1st Tuesday of the month).
Related: How To Save Money On Groceries
I split up the meat into smaller portions and use our deep freeze to store it for the month. Some people buy a side of beef and freeze it, which they claim can save money vs. buying retail.
This takes a fair bit of organization but since we started meal planning along with tracking our monthly expenses we have saved about $250/month. We often end up with leftovers to use for lunch, which saves us even more money.
Not only that, my wife and I have lost weight, tried and fell in love with new recipes, and have actually become really good cooks.
Stay flexible. Although meal planning sounds quite rigid, we switch meals all the time based on our schedule, what the weather is doing (for BBQ’s), or what might spoil in the fridge if we don’t eat it right away.
Related: 35 Ways To Save Money
The point isn’t to live like you’re in the Army. Use these money saving tips to eat a little bit healthier, and enjoy more time with your family.