Give Me Back My Five Bucks - Page 20 of 2812 - a quest for financial independence

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Spending Recap: Dec 30, 2013-Jan 5, 2014

Monday 30th
No Spend Day!

Tuesday 31st
No Spend Day!

Wednesday 1st
$5.40 coffee

Thursday 2nd
$11.78 lunch

Friday 3rd
$15.40 lunch
$36.47 groceries

Saturday 4th
$12 shipping
$40 dinner & drinks
$7.50 taxi

Sunday 5th
$20 lunch

Freelance Income: $0
Expenses- $148.55

TOTAL: - $148.55

Well, that was a spendy way to start the year. :) BF and I rang in the New Year by going out for dinner at one of my favourite restaurants, East is East. They were offering a champagne dinner with live music, and we were driving through the neighbourhood, so it made sense to check it out. :) After that, the night was pretty low key – watching Netflix and falling asleep immediately after midnight. Party animals!

I didn’t buy groceries for the shortened work week, which resulted in buying lunch while at work. I finally bought groceries for the weekend, only to spend all of Saturday and Sunday downtown with friends who are visiting from out of town. My goal for next week is to keep expenses to a minimum. With field hockey practices back on my radar, my social life will take a bit of a rest for the next few months, and I’ll be eating at home more often.

How was your week of spending?

Why I’m reducing my mortgage payments

One of the ideas I’ve been wrestling with for the last few months is my mortgage payments. I’m currently paying $660 bi-weekly, which is approximately $110 more than my minimum payment. I was happily paying this extra money until I realized that early retirement was still my number one financial goal. And if it’s the most important financial goal for me at the moment, why wasn’t my budget reflecting my priorities?

I thought about this for a long time, debated the merits of mortgage payments vs. RRSP with friends, tried to find money in my budget, got jealous because BF has a pension plan waiting for him in less than 20 years… and then I decided to make my move.

Related: What does retirement mean to you?

The extra $110 I’m putting towards my mortgage on a bi-weekly basis is gone. Instead, I will funnel the money into my RRSP/TFSA. That’s an extra $2,860 I can save in 2014, and will help me with my goal of saving at least $750/month towards retirement this year. With the tax refund I will receive, that money will go towards my mortgage as a lump sum payment.

I think this is an appropriate move because even with just my accelerated bi-weekly payments, I will be finished paying off my mortgage before my desired retirement age. And if that’s the case, it makes sense to put extra money into my retirement accounts now so that I can benefit from compound growth for the next 25+ years.

Take a look at the chart below. The dark blue represents accelerated bi-weekly payments without any additional prepayment options. That cut my original 30-year mortgage down by 4 years.

What I have been doing for the majority of last 2.5 years is what the orange represents: accelerated bi-weekly payments with an additional 20% prepayment. That knocked my mortgage down even further, to 19 years. It’s hard to give that up.

I’m anxious about reducing my mortgage payments, because my plan was always to pay down my mortgage as fast as possible. It doesn’t feel right to pay down debt at a slower rate than I’m capable of. But the past 2.5 years of home ownership have taught me a lot. Being a single homeowner is difficult. It’s hard to get ahead, and planning for the future is tough on a one-income household – especially a future that includes early retirement without a company pension. I’m comforted by the fact that my tax refunds will now go towards my mortgage, so at least I’ll continue to over contribute in some way. :) And, by changing the way I save my money, I believe I’m keeping myself on track to achieve my financial goals.

Have you ever had to choose between paying down a mortgage faster or contributing to retirement?

December 2013 Goals: Review

This was a surprisingly good month for me, even though I went over budget. I spent much less than anticipated on food – which just goes to show you how many times I went out to eat during the month. But it also helps that whenever BF and I hang out, we have been cooking meals instead of going to restaurants. I also spent much less than I thought I would on clothing. I guess I thought I’d do more shopping during the Boxing Day sales, but nothing appealed to me.

12 - December Recap

Over Budget:

  • Internet – why is internet so expensive? This is the second cheapest plan that Shaw offers (the cheapest plan is just $5 less). I’ve considered TekSavvy because they’re only $35-40 instead of the $60 I pay with Shaw… but a friend uses them and says the service is horrible.
  • HouseholdI bought a $450 LG TV. But in order to pay for it, I sold my iPad ($350) and my old Canon digital camera ($125).
  • Entertainment – I’m actually surprised this number isn’t more, considering how many meals I ate out over the month.

Net Worth Change+ $1,546 (1.68%)

My net worth keeps increasing every month, so I’m happy about that. It shows that I’m moving in the right direction. That being said, I’m really motivated to see even bigger gains going forward. The increase shown this month is due to RRSP contributions and payments to my mortgage.

December 2013 Goals:

  • Run 100 km. FAIL. I want to say that there was a valid reason why I didn’t hit this goal, but it was basically because I was lazy. I mean, field hockey season did last an additional week longer than I thought it would (we finished on Dec.15), but still. I only ran 61.7 km.
  • Save $700 into my Retirement Portfolio. CHECK! I contributed $750 this month.
  • Take on a new freelance writing contract. CHECK! Well, I mean, it’s not a contract, and I’m not contributing weekly or anything. But I am getting paid on occasion, and it’s a legitimate gig, so that still counts. :)
  • Earn $1,200 in freelance income. PASS. Well, I only earned $770 in freelance income. A few deals fell through, and I haven’t been paid out for some of my work yet. But, I did manage to bring in an additional $630.71 by selling things that I own and through Great Canadian Rebates. SinceI did bring in $1,400 extra, I’m giving myself a pass even though maybe I don’t deserve it.
  • Clean out my closet and my storage area. FAIL. I’ve set aside a pile of clothing in my closet to either sell or donate, but I didn’t even touch the storage area… except to pile more crap into it.
  • Make a list of home improvement projects that need to get done. CHECK! I’ve made a master list of all the things I want to change in my house, and then I narrowed it down to three projects that I’d like to tackle for next year.

Spending Recap: December 23-29, 2013

Monday 23rd
+ $163.64 freelance income
$10.67 shipping

Tuesday 24th – Victoria, BC
$66.75 ferry

Wednesday 25th – Victoria, BC
$11.50 movie

Thursday 26th – Victoria, BC
No Spend Day!

Friday 27th – Victoria, BC
$38.04 gas
$16 lunch
$13 dinner

Saturday 28th – Victoria, BC
$21.78 brunch
$21.76 dinner
$11.50 movie

Sunday 29th – Victoria, BC
$66.75 ferry

Freelance Income: + $163.64
Expenses- $277.75

TOTAL: - $114.11

Being home for most of the holidays was a great way to end an interesting year. It was nice to see friends and family, and recharge before taking on 2014. I did a lot of socializing this week. More than I thought I would, but I only went slightly over budget in the Entertainment category (as you’ll see when I post my monthly recap for December tomorrow).

The biggest expense from the week was my ferry costs getting to Victoria. I took my car over because I had a bunch of gifts, a real hedgehog to deliver, and I was going to need my vehicle for a bunch of different things. Christmas is one of the only times I will pay to bring my car across, because do you see how much it cost me!? And it’s only going to get pricier. I saw an article today that said BC Ferries will be hiking their rates up by 3.5% this month. :| It’s just getting too expensive to go home to visit, so I think I’ll only go back on special occasions during 2014.

How was your week of spending?

2014 Annual Goals

The overall theme of 2014 will be to take chances (don’t be afraid), and focus on saving for the future.

During 2013, I learned a lot about myself. I learned that I’m a lot stronger than I thought I was, and I learned that if I really want to be happy, I need to take chances. I can’t spend too much time over analyzing every small detail of my life, and worrying if I’m making the right decision. Usually, my gut feeling ends up being the right one anyway, so I can’t be afraid to go for what I want. Besides, you’re not really living life if you don’t feel scared every once in a while, right? :)

And the truth is, the goals I have listed below scare me. I haven’t been this focused on seriously increasing my savings for a very long time. 2012 was spent traveling (and saving minimally), and 2013 I did okay… but I know I could have done better. So 2014 is the time where I prove to myself that I have what it takes.

Retirement will take centre stage this year, as I’m drastically changing the way I funnel my money. I am no longer paying an additional 20% onto each of my accelerated bi-weekly mortgage payments. Instead, that $200+ each week will be put towards my RRSP and TFSA accounts. I think this is the right move to make considering the future life I want for myself.

Anyway, here are my goals for 2014:

Financial

  • Stay debt-free (aside from my mortgage). I feel like this goal is an obvious one, but it needs to be said.
  • Increase my income by 10%. Instead of putting a number value on my income goal for 2014, my goal is to increase my overall income (full-time and part-time) by a specific percentage. I think that this a bit of a stretch, but it’s still realistic.
  • Increase my net worth to $115,000. This is an increase of approximately $22,000. Last year my net worth increased by $17,000, so this will be a bit of a challenge for me. But if my income increases, and I stay on track with my RRSP/TFSA contributions and mortgage payments, I should be able to reach this.
  • Buy stocks. I purchased my first stock in 2013 (through my TFSA), and I’m actively tracking a couple of others for long-term growth. So, my goal for this year is to put $2,000 into stocks. It’s not a lot, but I’m comfortable with this amount.
  • Save at least $750/month into my RRSP/TFSA. This will likely be split at a ratio of $600/$150.
  • Save at least $50 bi-weekly into a travel fund. This is money that won’t be touched for a long time, and is separate from saving for annual trips that I take. I want to start putting away money for a big adventure. I don’t know when I’ll take this trip or where I want to go, but I do know that I’d like to travel for at least 2 months (preferably 3), and that will take a lot of coordination to work out… but I’d better start saving for it now.
  • Stay on budget every month. A big problem with my budget in 2013 was that I was always going over. I need to make realistic budgets for myself this year, and focus on hitting those targets. That’s the only way I’m going to be able to achieve the rest of my financial goals this year.
  • Sell at least one item every month. I have a lot of things that I just don’t use anymore… and if there’s one thing I’ve learned from Craigslist and eBay, is that people will buy just about anything. So I’d like to start decluttering and getting rid of some of the stuff in my house.

Personal

  • Go on one big trip. I want to scale back on travel, but I don’t want to give it up completely. I think the most cost-effective way is to take vacation immediately after a work trip, like last year when I went to Morocco after a conference in France. This year, the conference will be in Sweden. I’d love to explore Denmark and Northern Germany… but I’d also like to do a road trip through southern France/Spain/Portugal… or head back to Turkey… or go to Russia. So as you can see, I’ve got a lot of research to do. But whatever I end up choosing will likely be in Europe, will likely be in late October, and will hopefully cost less than $2,000.
  • Run in four half marathons and set a PR. 2013 was great. I ran in two 10km races, and two half marathons. 2014 is where I take my love for running and try to do something with it. Now, I’m not dumb. I know my body and its capabilities… I’ll never be an elite runner, but I do want to push myself to become better. My goal? To run a half marathon in 1:48 … that’s going to be about 6 minutes faster than my current PR.
  • Read 20 books. I have a huge list of books to read on GoodReads. Time to tackle them.
  • Spend less than $1,000 on clothing/shoes. Okay, this may seem like a ton of money, but I know I’ll need to replace my running shoes ($150) and field hockey boots ($150) at some point. If I want to spend more than this amount, I will need to sell my current clothes to come up with the money.
  • Make one new recipe every month. I’ve never claimed to be great in the kitchen, but I do like trying. My goal is to make at least one new thing every month.
  • Tackle three household projects. I want to re-finish my kitchen cabinets, get blinds installed, and re-paint my bedroom.

Professional

  • Research project management programs. I don’t want to go back to school full-time or take an intensive part-time program… but I am interested in some certifications. I don’t know all the options out there, and I honestly don’t know if this is something I want to (or need to) do to advance my career, so I’ll have to do a lot of research to figure out what my options are.
  • Take a French language class. This is probably going to have to happen. I’m really interested in continuing to grow as an employee, and without a second language (any second language) working for international companies can be difficult. French is the obvious choice because Canada is bilingual.
  • Get published 4 times. I don’t think I want to go back to a regular freelancing gig, but I do love writing articles. So my goal is to pitch and submit at least one article per quarter during 2014. It doesn’t matter if it’s online or in print, but I do need to get paid for it.

Any questions or comments? Let me know! :)