Financial Planning for 2013

Earn an average of $7,500+ per month.

My personal income goal for 2013 is $90,000 which works out to $7,500 per month. As I said previously, I’m not entirely sure how I’m going to reach this, but figuring out a way is half the fun so I’m excited to see what I can pull together.

Give more to charity.

Right now I give $25-$50 each month to charities, but it’s such a small fraction of my income, there’s no reason why I can’t ¬†increase this. I generally give to whatever cause catches my eye/heart each month, and while I’ll continue to do that, I’d also like to donate to one cause regularly for the long term.

Start a Freedom Fund.

A Freedom Fund (sometimes called an “F#$% You fund”) is savings set aside to pursue a “free” life away from the daily grind of traditional full-time work. I have no intention of quitting the 9-5 life anytime soon, if ever, but I’d still like the option to do so. I would consider this buffer money if I ever decide to leave work to start a business or choose to stay home to raise children.

Pay off my remaining student loan.

I could do this sooner rather than later, but I hate putting money towards a loan that’s only costing 3% interest instead of putting the money in long-term investments that will return more than that. At this point I owe $8,500 and I expect to bring that total under $5,000 within the first two months of the New Year with regular payments and my income tax refund. Then I’ll reassess how aggressively I want to repay the remaining balance. In any case, I’ll be debt-free in 2013.

Save more for retirement.

For the past 1.5 years, over 20% of my gross income has been being socked away for the years when I’m old and grey. This is thanks to my mandatory employer pension with matching. I’m still not all that into planning for life in my seventies when I’m only in my twenties, but my tax credits are about to run out so it’s time to max out my RRSPs. Because RRSPs can also be used for education or a down-payment on your first home, I feel more inclined to lock my money up in this savings vehicle.

Spend less than $4,000 on personal travel.

I’ve been spoiled with two trips to Europe in two years and even though travel is a huge priority to me, there’s some other financial goals that need to be put first in 2013. At this point, I have one personal trip and about 4-5 work trips planned for the coming year, all of which are in Canada. In an effort to be more frugal, this might be the first in four years that I stay within my own country! Or maybe not.. a trip somewhere warm and tropical might be in order. In any case: $4,000 max.

Put more money into the stock market than anything else.

Looking at my spending for 2012, the top three categories were debt, bills and travel in that order. Since my debt will be gone sooner than later and I’m cutting down travel, I’m hoping to increase contribution to my brokerage account and take a super aggressive stance with investing in stocks, to the point that I put more money in this than anything else. It’s bold, but it’s a good time for me since I’m young and have a fairly large disposable income. Furthermore, since the bulk of my retirement savings is in a very safe place, I can take risks with my money without the worry of irreparably screwing myself over in the future.

… and that’s it for now! What are your financial goals for the new year?

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Comments

  1. I love ALL of your goals! I really should set myself an income goal next year. I’m looking more seriously at multiple income streams come next year, as two is not enough! Besides that, I want to pay off my debt, fully fund an emergency fund, do some travelling, and finally get back into investing. It should be a good year!

  2. I like your idea of giving to charities, especially when you can get charitable tax credits back from the government :0) Haven’t done my goals for next year yet. Still have to review my 2012 goals first, but no doubt I plan to put more $$$ into my brokerage account next year. I think stocks will do really well in the next 6 – 12 months.

    • LOL yeahhhh tax credits ;) It’s small but it does count. I like knowing where the money is going anyway.

      I agree stocks are definitely coming up… with the exception of that Fiscal Cliff everyone is going on about

  3. My financial goals are focused on saving to get rid of my girlfriend’s student loans when we eventually get married. After that we’ll have to start up our car savings again and save for a kitchen remodel! I doubt that will all happen in 2013 though. If we get the loans gone that’d be good enough for me.

  4. Since we’re not paying any interest rates over 3% we’re mostly investing in the stock market now (with 3x as much going towards stocks as we have going to debt repayment). It’s not certain but I like the potential rewards much better. And to go along with that I don’t spend as much time thinking about my 70s as it might seem. It’s all just one big freedom fund that can provide more options later.

  5. We will sit down in the next week or so and go over all our numbers for 2012 and write up goals for 2013. Since we have no debt it will be more about investing and the blog so I’m interested to see where it takes us in the New Year! I’ll be here following your journey I hope you follow ours … cheers mate! Mr.CBB

  6. So, this is technically an 18-month goal because of the way my industry works (at least in the US), but GET A JOB!! I just found out last week that I’ll be set to graduate next December. I can’t wait to be a grownup (she says, as she goes back to studying for finals…)

  7. Exciting!

    I haven’t sat down with my husband to discuss what goals we should set for next year. Unfortunately, I think we’ll be MUCH more vague than you.

  8. I think you are on the right track… To me the stock market and freedom fund go hand in hand and there really is no better feeling that know you can just say “I’m out!”
    I think my main goal this year is to invest more in my taxable account. It’s pretty healthy now, but I can always save more and need to since we want to move abroad within the next 3-5 years (when the little guy is old enough to understand it).

  9. I’m so nervous to do this! I definetly didn’t meet my goals this year. Life in 2012 decimated me…but, oh the blog posts I could/should write! My goal will be to get my emergency fund back up, and decide if I want to stay in this area or move, and then job search wherever I decide to live. Eeeep!

  10. John S @ Frugal Rules says:

    Looks like you’re on a great track here! I like that you’re going to be focusing on investing more in the stock market as that really is a great way to build wealth. We’re planning on doing more of that this upcoming year ourselves.

  11. I haven’t made a declaration for all my financial goals, but one of them for sure is to make 80k. Since I’m a freelancer this is both possible, but difficult, especially coming from what I made this year.

  12. My main goal is to pay down the mortgage aggressively. I want to get the balance down even lower than what my five year plan requires and I think I can do it since I’m ~$8k ahead of the end-of-year goal for 2012.

  13. I think my plan is to get a job and start saving money, THEN start paying my student loan. Can’t really do that without taking the first step, though. Oh well.

  14. MyMoneyDesign.com says:

    That will be bad ass if you make it $90K! Does your job have a flexible wage, or are you talking total income (from other sources like your blog, etc)?

    I’m also going to put a huge chunk back into stocks. I did my homework through 2012 and decided that dividend stocks will be one of my tickets to early retirement. So now its time to make it happen!

    • Bulk of it is my fixed salary at my work, but a huge amount I’m hoping will be from the blog, freelance writing and increasing my passive income from investments.

      Dividend stocks are sweet, they make up the bulk of my portfolio.

  15. Great bunch of goals. I would be over the moon if I could make $90,000. I haven’t sat down to think about what I’d like to accomplish next year, but I do plan on mapping out some goals between xmas and new years.

  16. Looks like you can afford generous Christmas gifts this year for family and friends;) Reward those who really care.

  17. I’ve just started to think about my goals for the next year too. I do know that saving more for retirement will be one of them, but now I really like the idea of starting a “F**k you fund” too!

  18. These are great goals, especially your income goal! I can’t imagine making that much in a year, but I have no doubt you’ll reach that target. I haven’t given a ton of thought to my financial goals this year but I DO know that I want to pay off my remaining student loan balance, make $5,000 in side income, and get married without taking on a large amount of debt. I need to do up a post like this and get my goals figured out!

  19. Those are some awesome goals. Ours are to keep saving and to keep paying off our house!

  20. I’m with you all the way on the last one… 2013 will be a year of investing in Asian markets for us :)

  21. These are great goals! I especially like your charitable giving goal; I need to step that up as well!

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