Looking back at our own financial situation in 2013, we did stick to the basics and continue to grow our net worth – we continued to make extra payments on our mortgage, we contributed money towards my wife’s tax free savings account (TFSA) and we managed to keep our monthly expenses as low as possible.
Related: How I Multiplied My Grocery Savings
We did, however, make a couple mistakes that I wish we could have done differently.
Delaying Our Cash Back Credit Card
One of the biggest mistakes we made was putting most of our purchases on our BMO Air Miles credit card. The card itself is great for anyone looking to collect Air Miles, but we don’t travel as much as we used to and could use the cash instead.
We recently got the Scotia Momentum Visa Infinite cash back card and it’s been great – so great it has left me wondering – why didn’t we get it earlier?
Related: Why I Gave Up On Air Miles
We get 4% cash back on gas and groceries which, for us, is huge.
My wife tries to buy organic foods at smaller food stores that tend to be more expensive than regular grocery stores. Due to a change in my wife’s workplace, we have also been spending more on fuel each month.
The Scotia Momentum Visa Infinite card helps us get more cash back than the equivalent in Air Miles we would get if we bought our items on the BMO Air Miles Mastercard.
Attempting to Time the Market
Another regret I have for 2013 (especially the second half) is trying to time the market. If I could go back and do it again, I would definitely have put more money into the market as it became available rather than trying to time the market.
I had waited about 6 months for a market correction to hit the Canadian markets. In that time it had increased 8% – while my money sat on the sidelines.
In 2013 I had about $20,000 in cash that was waiting to be invested. Assuming I had invested it all into dividend stocks that pay an average of 5% annually and that they had gone up 8% along with the rest of the markets, I could have made just over $2,000 in the second half of 2013 alone.
Related: 5 Advantages of Dividend Stocks
Not Increasing our Automatic Monthly Savings Payments
Another financial mistake (this one is relatively minor) that I made was not increasing our monthly savings payments.
Each month, we have money automatically taken from our bank accounts and put into various places – RRSP, TFSA and other savings accounts. It seemed like 2013 went by in a hurry because I somehow missed increasing the amounts that go into each type of savings.
Each spring our wages typically increase slightly. Rather than spend any extra money we receive, we try to put the extra funds towards our savings and leave only a little bit extra for spending money.
If our wages increase 5%, we would usually increase the monthly savings amounts by 4% and leave the remaining 1% as spending money.
In 2013, we failed to increase our monthly savings amounts and will need to catch-up sometime soon. The winter has been hectic with work but we plan on visiting our bank soon to change (increase) our monthly savings payments.
Conclusion: overall, 2013 was a good year for our savings to grow and we managed to keep our monthly expenses as low as possible. We did get a cash back credit card that should give us more money back for our spending, I’ve made an effort to put any extra available cash within my RRSP into dividend stocks and we will be increasing our monthly savings payments soon.
Did you make any financial mistakes in 2013?