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Weekend Reading: Checking In On My Financial Goals Edition

I publish my financial goals here every year to share my priorities with readers and to hold myself accountable to achieve them. The simple act of writing down your goals and reviewing them periodically can significantly increase your chance of success.

My 2019 financial goals were fairly straightforward. Here’s a recap, along with the progress or outcome to date:

  1. Contribute to RRSPs – I’ve caught up on all my unused RRSP contribution room and, due to my pension adjustment, my RRSP deduction limit for 2019 was just $3,600. I set up automatic monthly contributions of $300 and I’m on track to max out the limit for this tax year. For my wife’s RRSP, which we moved to Wealthsimple, she contributed $10,000 in February (for 2018’s tax year), and we’ll plan on another $8,500 contribution in early 2020 to use up her remaining room.
  2. Contribute to TFSAs – I’ve still got a long way to go before catching up on all my available TFSA contribution room. My goal was to put away $1,000 per month this year to help me close that gap. I’ve done exactly that, and should have my TFSA completely maxed out in a couple of years. 
  3. Continue to max out RESPs – This is a goal we’ve had on auto-pilot for the past few years. I have set-up automatic monthly withdrawals of $416.66 to max out the education savings grant for our two children (10 and 7).
  4. Don’t take on any new debt – All of the above goals were contingent on not taking on any new debt. We’ve paid off a car loan and line of credit in recent years, freeing up $1,500+ per month to put towards our savings goals. I’m pleased to say we haven’t had to borrow for anything this year and so we continue to pay down our last remaining debt (mortgage) while ramping up our other savings goals.
  5. Create my own raise – My salary had been frozen for the previous five years. I’ve had to get creative to manufacture my own raise by using cash back websites, taking advantage of credit card offers, and selling used items online. While I continued to do those things in 2019, I also surprisingly received a 4 percent increase at work earlier this year after taking on some new duties.
  6. Keep our trip under $12,000 – We went on an epic 32-day trip to Scotland and Ireland this summer. We kept our costs down by redeeming close to one million rewards points for travel. That included 5 free nights in Edinburgh and 5 free nights in Dublin through the Marriott Bonvoy rewards programs, and also free round-trip flights for four courtesy of Aeroplan miles (we paid less than $1,000 in fees and taxes). The bulk of our budget was spent on our Airbnb stays in Inverness and in Kilkenny, groceries and dining, and of course on entertainment and attractions. Altogether we spent around $10,500 out of pocket.

These financial goals were meant to get us closer to our financial freedom date, but also give us some ability to spend on things we enjoy such as travel. It obviously worked! We had an amazing trip and now all of us have caught the travel bug. We’ll be travelling more in 2020 than we ever have before.

Oh, and I quit my job a few weeks ago. My last day is December 6th. 

I’m already thinking carefully about next year’s financial goals and what we want to achieve. Obviously, growing my online business will be top of mind. And I’ve already mentioned travel. I’ll want to continue to max out our RRSPs, TFSAs, and RESPs. I’m also thinking about how I’ll spend my time, and how much will be allocated to work versus free time to spend with family. 

I’ll post my goals in the coming weeks, along with updates as I transition from salaried employee to full-time entrepreneur. 

This Week’s Recap:

I treaded into controversial territory in my latest post when I argued that Canadians have an income problem, not a debt problem. 

Thanks to PWL Capital’s Cameron Passmore and Ben Felix for giving me time to promote my fee-only financial planning service in their latest episode of the Rational Reminder podcast.

Erica Alini (Global News) took Preet Banerjee’s MoneyGaps financial planning software for a spin and explained how Canadians who cannot afford a comprehensive financial plan can get a money check-up.

I’ve been using the MoneyGaps platform to offer light advice and a check-up to Boomer & Echo readers for the low price of $199. If you’re interested in a financial check-up, or retirement readiness report, send me an email and ask me about MoneyGaps.

Promo of the Week:

We’re heading into Christmas shopping season and one thing we’ve enjoyed the past few years is getting the majority of our shopping done early and online. I mentioned we go through cash back websites such as Great Canadian Rebates and Ebates (now Rakuten) before we make an online purchase. It’s a great way to get anywhere from 2 – 10 percent cash back on spending you were going to do anyway. 

Become a member of Great Canadian Rebates and take advantage of online coupons and earn cash back rewards. GCR features over 400 merchants to satisfy all your shopping needs.

Ebates.ca (now Rakuten) pays you cash back every time you shop online, and it’s FREE to join. Sign up now and when you spend $25 you’ll earn a $5 cash back bonus.

Weekend Reading:

The Credit Card Genius site is back with their HUGE $1,000 cash Christmas giveaway. Head on over and enter for your chance to win.

Here’s a must-read from the Million Dollar Journey blog: The ultimate guide to safe withdrawal rates for Canadians

From the Toronto Star, five myths about the Canada Pension Plan debunked.

Former long-time Toronto Star columnist Ellen Roseman is back on the LowestRates.ca blog and she’s writing about insurance – personal finance’s blindspot.

An interesting piece on how the stress test is making it tougher to borrow later in life:

“because Joe had recently retired from his job as an inspector at a casino and Erin was a self-employed small business owner, they no longer qualified for financing under the mortgage stress test for federally regulated financial institutions.”

Your car loan payment may be way too high. Erica Alini from Global News explains what’s happening.

We’re all busy. This is how much time you should carve out of your schedule to look after your personal finances.

November is Financial Literacy Month and here’s a strongly worded piece by investor advocate Neil Gross on why Canada’s diluted ‘best interest’ rules might doom us to unaffordable old age

Dale Roberts from Cut The Crap Investing explains how to spot investment sharks who are looking to part you from your money.

A Globe & Mail reader asked where to save next after maxing out her RRSP and TFSA while working and living in Canada’s Arctic.

As fundamental as market efficiency is to good financial decision-making, it is poorly understood by most investors. Ben Felix explains efficient capital markets in his latest Common Sense Investing video:

Here’s some straight-talk from Rob Carrick, who says owning a house doesn’t automatically give you an A+ grade in personal finance:

“Surveys about stress consistently show that money is one of the biggest worries people have right now. Somehow, people can’t make the connection between this stress and home ownership.”

Finally, here’s a post from T.E. Wealth’s Aaron Hector explaining how to increase your tax benefit for charitable donations.

Have a great weekend, everyone!

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2 Comments

  1. Betty Therriault on November 10, 2019 at 12:22 am

    Neither my husband (who has since passed away)participated much in RRSP’s . My husband, $1000.00 and myself about $75,000. He felt the Govt. benefitted more than the individual. Since the introduction of TFSA’s I tend to agree. Also with his passing, I can see the Govt. would have taken a healthy slice had he had a significant amount in the plan. That decision was made when we were stretched for dollars and we preferred to put it in our own business. Luckily, our business proved to be very successful.
    Just a thought for you. Rob !

    • Robb Engen on November 10, 2019 at 9:34 am

      Hi Betty, thanks for sharing your experience. It’s important to know that RRSPs and TFSAs are in fact mirror images of each other. The decision to contribute to one over another comes down to the tax rate in the year(s) of contribution, and the expected future tax rate in the year(s) of withdrawal. If those tax rates are identical, there is no difference in the outcome – you’ll have the same money in your pocket whether you chose an RRSP or TFSA.

      I’ll also point out that this debate is largely settled for me. I’ve maxed out all my available RRSP room, and will have just $3,600 in room created for next year. After that, since I’ll be taking out dividends from my small business, I won’t create any additional RRSP room. That means I’ll just have my TFSA and my business in which to contribute and invest.

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