2019 Financial Goal

Picture from my trip to Mt Kilimanjaro in 2015
Today I am going to share with you my financial goal for 2019, maybe you can copy my goal or use this post to inspire your own financial goal. I've been reading a lot of books, article, and web pages on personal finance the more I am moving away from dumping all extra money into my mortgage. Therefore, in 2019, my financial goal is to max out my contribution room in both mines and my wife's TFSA and contribute the max amount for RESP to get the full government grant. I think I have about $10,000 of contribution room and my wife about $20,000. For those that don't know, you can check how much contribution room you have by logging into your CRA account at https://www.canada.ca/en/revenue-agency.html.

While we are on the topic of goal setting, there is an acronym that you can use for goal setting. SMART, it stands for: Specific, Measurable, Achievable, Realistic, and Timely. Another way you can approach goal setting is just with the five simple W's. It's been proven that a lot of new year resolutions fail because people are just not good at setting goals. If your goal is to invest more this year then specify how much more, this way you have a measurable end result.


7 Steps to Getting Rich!

I recently did a 13-hour road trip driving from Toronto to Eastern Canada, and to past the time I decided to listen to 13 hour worth of Dave Ramsey podcast. I learned about Dave Ramsey just from reading other financial blogs and forums. Dave Ramsey is a financial coach who tries to teach people how to get out of debt and start building wealth. He uses a very simple 7 steps system that every one of his audience can follow. Anyway here are his 7 baby step in the picture below. 

Image result for dave ramsey

Before starting any of these steps, it is important to ensure that you have a budget and that your monthly spending doesn't exceed your income. If you can't have a positive monthly cash flow then you'll need to either generate more cash or spend less. Spending less might mean getting a cheaper house or a cheaper car so that your monthly payment is much less.  

Step 1
Pretty straight forward, it literally just means putting aside $1,000 in a normal savings account. That is it, don't need to invest it or anything.

Step 2
This step is to pay off all your debt minus excluding your mortgage using a technique call debt snowball. A very common method to build momentum while paying off debt, you can easily google "debt snowball" and learn about it. 

Step 3
Once all your debt has been paid off, then you put more money into your savings account, this pile of money becomes your emergency fund. Dave's advice is to keep this fund liquid, the point is not to invest and grow this fund. 

Step 4-6
Then a lot of time Dave will suggest doing these three steps simultaneously, his rule of thumb was to invest 15% pre-tax income for retirement. Then with money left over you can choose however you want to split it between saving for a short-term goal (vacation, new car, down-payment, etc.), save for kids college fund, and put extra-payment towards your house. 

Step 7
Once you have your house pay off then he tells people to be generous and give to a cause that matters to them. 

I love the 7 baby step because it's so simple and helps you prioritize what you need to do depending on which step you are currently at. I also like it because it separates a mortgage debt with other debt, in a way it tells people that it is okay to have a mortgage as long as that's your only debt. It definitely took the pressure off me hearing about it, before I put a lot of pressure on myself to be debt free that I was prioritizing mortgage over investment. Now I feel that I can split my money evenly between mortgage, investment, and other savings. A key thing I want to point out is that if you can't invest around 15% of your pre-tax income towards retirement then you'll need to revisit your budget and see where you can cut spending.


First Net Worth Update of 2019

Happy 2019, January is goal setting months, might be a good time to start getting some good financial goal for the year. I'll share with you all my goal for 2019 in the next few weeks.

Chequing: $581
TFSA Investment: $75,408
Real Estate: $224,000 (Purchase Price of my house)
Define Benefit Work Pension (Current Transfer Value): ~$153,000 (Last checked in Jul 2017,aprox $1000 a month of contribution)

*Automobile is not included (No monthly car payment)

Mortgage: $122,440

*Credit Card is paid in full every month

Last Net Worth Update: $323,347
Current Net Worth: $330,549