Tag: Money Goals

What are Your Money Goals for 2024?

At the time of his point, there are 26 days left in 2023. Hard to believe that this year will be done in little over 3 weeks, but that’s the reality we’re living in. Maybe you should take a few minutes to think about 2024 and your money goals for the upcoming year.

If you don’t have any, that’s okay. I’ll lend you one of mine. It’s simple and straighforward:

My money goal for 2024 is to live below my means and invest a nice chunk of my take-home pay.

Now, this isn’t my only money goal. And this one needs a bit of polish because it’s a bit vague. After all, what does “a nice chuck mean”?

For me, it means investing $1 out of every $3 that I bring home. You can choose a different percentage if you want. Maybe you’re hardcore and you want to invest atleast 50%. That’s fine. Or perhaps you’re just starting out and you want to go small, with something like 5% or 10%. It’s not ideal, but it’s definitely a way better than investing 0% of your take-home pay.

The next area that needs fleshing out is the part about investing. After all, money sitting in a bank account is not invested. It’s an emergency account, or maybe even a sinking fund. However, it is most definitely not invested for growth. And I want my money grown big and strong!

For me, investing my money means filling my TFSA and my RRSP with equity-based exchange traded funds. Equity-based ETFs allow me to buy small pieces of a great many companies that are listed on the stock-exchange. As these companies grow, so do my investments in them. At some point, those companies will pay out dividends and capital gains. In a nutshell, this is passive income that is taxed much more lightly than my paycheque. For the record, I love earning dividends and capital gains!

Living below my means is a simple shorthand phrase that means I won’t spend every penny I make. Oh, I’ll definitely spend some of my take-home pay. I just won’t spend all of it. After all, if I spend it all then I’ll have nothing left to invest. Without anything to invest, I’ll have no way of ensuring that my dividends and capital gains grow large enough to replace my paycheque. And that would be a shame.

What about you?

Think about your life. Determine whether you want something different. Either way, carefully consider if the money you have is being used to make your life just the way you want it to be.

And be ruthlessly honest with yourself. Are you spending to impress others? Do you have things just because other people have them?

For myself, I cancelled one of my streaming services today. It wasn’t that I couldn’t afford it. Rather, my motivation for cancelling was that I simply didn’t want to pay for it anymore because it wasn’t making my life better. It doesn’t matter that others have that service. That’s their choice and, hopefully, it brings them great joy. For me, this expense won’t be missed. The money can go towards something else.

Do you have expenses like that in your life? Are you still paying for something even though it no longer brings you happiness? If yes, then what’s stopping you from cancelling that service?

Never forget that you should always be the one in control of your money. You’re a Single Person, which means that you don’t have to consult anyone else about how to spend your money. This is one of the superpowers of being single. Every penny you earn is yours to do with as you please.

Don’t give away your superpower!

Next Steps on the Path

Perhaps you’ve already set up your sinking funds, your DRIPs, and your automatic savings plans. You’ve already done everything to make sure that your money is working hard and churning out those sweet, sweet dividends and capital gain. Congratulations!

What is the next step? Well, I would have to say that your next step is figuring out how to best spend your the rest of your money.

While I’m a huge proponent of savings and investing, I also know that we have to live in the present too. There’s no sense getting to dotage and not having anything to reflect back on. Also, no one is promised tomorrow. That’s why it’s so vitally important to live in the present once you’ve set up systems to have your money automatically invested.

Is there a class you want to take in 2024? If yes, then put it on your list. Are you interested in travelling beyond your city, province, country? If so, then jot that down too. What about moving? Replacing a vehicle? Taking another job? Joining an amateur sports league? Starting a garden?

Whatever it is, write it down. That’s the first step. And then, you prioritize which goals absolutely have to be done in 2024 and which ones can roll over a little bit longer. For example, let’s say you want a new car but your current vehicle works just fine. That’s okay. You can still want another vehicle. All you need to do is take advantage of the fact that your current one is running just fine. Start a sinking fund and throw a “car payment” in there very month. Assuming all goes well, your current vehicle will run until you have enough money to buy the next one.

See how that works? You wrote down a money goal and you came up with a plan to get what you want. By creating a sinking fund and using an automatic transfer plan, you won’t have to go into debt. Maybe it will take a few years to save up for this big of a purchase but so what? If something bad happens to your current vehicle, the money will be there as a down payment on the next one and your car payments – shudder!!! – will go to your financing company instead of your sinking fund.

Let’s go back to the example of you taking a course. Maybe you’ve always wanted to take a culinary tour in Italy. Food and travel combined – what could be better? Write it down. Is this very, very important to you? If yes, then start a sinking fund today for this trip so that you need not rely on debt to achieve this goal. Once your automatic savings plan is in place, the next step is to visit Google and get a list of websites for companies that offer these kinds of tours. While you’re building the stash you need to move this money goal from your Want-To-Do list to your One-of-the-Best-Things-I’ve-Ever-Done list, you’ll be learning about what it takes to get the most out of this kind of trip.

Living the Life You Want Is Achievable

So long as you control how your money is spent, you can achieve all of your money goals. The first step is defining what your money goals. The second step is sticking to your plan. The final step is living the dream life that you’ve created for yourself.

Don’t delay anymore. Decide what you want then go and get it!

Money Goals – Are you meeting yours?

How are you doing with your money goals?

At the time of this post, two-thirds of 2021 are in the rearview mirror. We’re heading into the final quarter of the year, so you should have a good handle on your progress. Have you been able to allocate your money towards your most important goals? If not, why not? And if your plans have been derailed, what are you doing to get them back on track before 2022 gets here?

Personally, I’m a big fan of writing things down. I love putting my goals on paper, then referring to that paper throughout the year. Of course, I’m not perfect… and some of my goals don’t get accomplished. It’s not unusual for me to look at my handwritten notes 13 weeks later and say something to myself like: “That’s odd. I don’t remember wanting to do this.”

This is not a good way to accomplish my goals. I’ve learned the following insight about myself – I have the memory of a fruit fly with Alzheimer’s.

And I’m not exaggerating by much. The major money goals are met every single year:

  • contribute the max to my TFSA in January? Check!
  • pay annual insurance premiums in one lump sum? Check!
  • invest a portion of every paycheque into my exchange-traded funds? Check!

And do you want to know why the major money goals get accomplished every year? It’s mainly due to the fact that I don’t have to think about doing anything. I’ve set up automatic transfers to take care of these goals. My paycheque is deposited to my bank account – my automatic transfers whisk money into various savings & investment accounts – my goals are met without any added effort on my part! It’s a magical, wonderful process.

Getting back to those handwritten goals that are forgotten, moments after I put down my pen…

Yes – those ones deserve a bit more attention. I haven’t come up with a perfect solution for those ones, but I’m working on it.

I’m a fan of Tangerine. This bank allows me to have 5 sub-accounts under one bank number. Each sub-account has a name. Tangerine also allows me to create Money Rules, which are fantastic! This week, I took another step towards meeting my goals. Each sub-account is named after my most important priority.

Every two weeks, a part of my paycheque is transferred into Sub-Account #1. My first sub-account is a slush fund for things that occur each year, but irregularly. Think unexpected car repairs or appliance replacement. These items have to be funded, and I would prefer not to use credit to pay for them. Also, I don’t want to deplete my emergency fund for car repair or a new fridge. My emergency fund is there to replace my income should I lose my job. Anyway, I keep a few thousand dollars in Sub-Account #1. Once I’ve hit my target, the first Money Rule kicks in.

Money Rule #1 says anything over-and-above the target amount for Sub-Account #1 is to be automatically transferred to Sub-Account #2. I use this second sub-account to accumulate money for my annual RRSP contribution, annual insurance premiums, and property taxes.

Once the target amount for Sub-Account #2 is met, Money Rule #2 kicks in. Anything over-and-above the second target amount is transferred to the sub-account of my next highest priority, until all 5 sub-accounts have been fully funded.

It’s a pretty good system. Its biggest drawback is that I didn’t put it into action until last year. Ah, well… no sense crying over spilled milk. The fact remains that I’m using it now and my handwritten goals are still being funded. Tangerine allows its customers to change the names of the sub-accounts. As one goal is met, i.e. renovating the bathroom, I usually change the sub-account’s name to the next thing I want to get done. This is why one of my sub-accounts is currently named “New Blinds”. It’s not a particularly sexy name, but it effectively reminds me of how the money will eventually be spent!

Pursue your best life!

Is anything stopping you from meeting your money goals?

Maybe your memory is like mine. If so, you have my sympathy! You have goals, but you’ve forgotten what they are. It happens. Protect yourself from your faulty memory by using automatic transfers to fund your goals.

It’s also possible that other priorities popped up and derailed your goals. You know your life better than I do, so I’m not here to judge the choices that you made. I’m simply going to nudge you towards reviewing your goals and what you need to do to meet them. And if you can’t meet them this year, that’s fine too. What isn’t fine is giving up on your goals. You’ll never meet them if you quit pursuing them. That’s just how life works.

Personal finance is personal for a reason. Everyone’s circumstances are different. If unexpected events knocked your money of the path you’d set at the start of the year, then so be it. I’m simply here to give you a nudge about not abandoning your goals, even if events of this year went in a direction you hadn’t expected. No – I can’t promise that it will be easy. All I can do is encourage you to not give up on the goals you set for yourself, since I believe that they will get closer to living the life you want to live. And if they won’t bring you closer to your dream life, then ask yourself why you created them in the first place?

Your money goals should be helping you build your very best life. At the end of the day, money is a tool. When spent in a way that brings your dreams to life, that maximizes your joy & happiness, you are putting your money to its very best use. Give me one good reason why you shouldn’t be putting your money to good use.

So if your goals have gone sideways, figure out what you most important next step needs to be. Evaluate your money goals and determine if they’re still important to you. If yes, then figure out what you need to do in the next 13 weeks to get closer to achieving them. And if the money goals of early 2021 are no longer important, then define new ones and create a plan for achieving them. You’re the only person who knows your heart’s deepest desire. The responsibility lies with you to determine the most effective way to make your dreams come true. Start right now because your best life awaits!