Revisiting the 2012 financial goals

Earlier this year, Brian discussed our 2012 financial goals.  We try to set our financial goals each year.  It gives us something concrete to work towards and when you complete a goal, it feels great.  At the time, I wasn’t sure where I would be employed or even IF I would be employed.  Kind of hard to set goals when there is a lot of uncertainty!  We did our best and I felt like I set some modest goals that were still achievable even in a worst case scenario.  But now that I am soon-to-be gainfully employed, I felt like it was time to revisit those goals and set myself some new expectations.

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Old Goal #1: Grow emergency fund to $2000

This was a fairly safe goal.  My emergency fund currently has $1300 and some change in it.  I am on track to meet this goal as I am planning on adding $700 to it as soon as I get my tax refund.  I’m going to keep this goal as-is, because honestly, there aren’t really that many emergencies that would knock out both my emergency account and Brian’s account and all of our insurance in one fell swoop.  Sure, it can happen, but I’m going to hedge my bets and guess that it probably won’t in the near future.  I am going to continue to grow my emergency fund, of course, but I am not going to add to it aggressively.


Old Goal #2: Raise net worth to $0

Right now, I’m at around -$10000 in net worth.  This is mostly due to student loans from my previous degree.  With my employment relatively secure, I would like to set a new goal of having a positive net worth of $5000 by the end of the year.  This will require some hefty saving and student loan paying on my part!  But, I am planning on saving a large percentage of my income, paying down my student loan, adding to my emergency fund, and putting money away towards a condo.  All of this should equal almost $2000 a month in savings.


New Goal #2: Raise net worth to $5000


Old Goal #3: Add $1000 to TFSA

Currently, I have a definite $300 allocated to my TFSA from my 2011 tax refund.  So that leaves $700 to meet my old goal.  I’m planning on contributing a small monthly amount once I start my job, so that should easily cover my goal.  The TFSA is not a huge priority for me, because I expect that the majority of my contributions will be in sporadic large chunks, as a result of things like tax returns.  I’m keeping this goal as-is.


Old Goal #4: Increase RRSP contribution to at least $100 per month

As a student, I currently contribute a measly $50 per month towards my RRSPs.  I still have a good bit of money in there, but it’s mostly due to prior contributions and my pension payout from the last time I worked at UBC.  Well that’s going to change!  When I set my goal for $100, I wasn’t sure if I would be employed at a good salary.  I figured that $100 a month would be manageable no matter what kind of job I had, however.  But now that I know I have a good job, I definitely want to contribute more!  I am planning on contributing $500 a month towards my RRSPs once my job starts in May.  I’m also getting payroll pension deductions of 6.5% which is matched by UBC at a rate of between 8-10% of my salary.  In other words, I’m going to be contributing A LOT.


New Goal #4: Increase RRSP contributions to $500 a month, plus pension deductions and employer matching.


Setting goals can feel kind of arbitrary.  For me, it’s important to set goals that are both achievable and challenging.  A part of it really is just picking a number out of the air and aligning it with my future goals.  For example, getting to $5000 net worth requires me to save or pay off debt equal to $15000!  That’s more than a quarter of my salary.  It’s doable, but will push me to make smarter decision with my money.  Similarly, saving $500 isn’t necessarily “easy” – it requires other sacrifices.  But it is not a burden either – I still leave myself money to spend on myself.  If you can’t decide on a number try to hit a value just above the average and you’ll be fine!

What kind of financial goals do you set for yourself?  Do you re-evaluate your goals as your situation changes?

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