Since the year is more than half over, I thought I’d take a quick look at my financial goals for the rest of 2014.
The year so far has been fairly good for finances. I’ve been able to save a decent amount each month, and have made steady gains towards reaching my RRSP contribution limit.
The only major expense this year has been a vehicle – a couple months ago we bought a second vehicle because I found it to be too difficult to manage with just one. With both myself and my wife working full time, our schedules just didn’t match and some days I was forced to take a long commute home instead of catching a ride.
We paid cash for the vehicle so there are no car payments, and the only added monthly expense will be the insurance/fuel for the second vehicle.
Going Back to School
In May my wife and I found out she has been accepted into grad school. She will be doing a master’s degree through distance education. She’s very happy about it – this is something she has wanted for a while now and has been looking forward to.
This means our schedules will likely become even busier than before!
It’s great that she has been accepted, but it also comes at a cost – the program itself is about 3 years and will cost over $20,000. This includes tuition and textbooks. Since it’s a distance education program, all of the courses are online so luckily she won’t have to worry about travelling to/from the university.
The education costs have been incorporated into the goals for the rest of the year: to set aside a small amount each month to help pay tuition costs. Luckily, the program is divided into courses and the tuition is paid in frequent, smaller amounts.
My main goal for the rest of 2014 will be to reach my RRSP contribution limit – for both myself and my wife.
This may not be possible by the end of the calendar year, but I’m hoping to have them both maxed out by the contribution deadline next year (March 1, 2015).
Once the RRSPs are maxed out, I can start working towards my main goal for 2015 – maximizing our Tax Free Savings Account (TFSA) contribution limits.
The TFSA accounts are nowhere near being maxed out, and this is something I’d like to work on for 2015.
Related: Hidden Advantages of the TFSA
The mortgage rate on the house is currently 2.6%, so we are taking advantage of the low rates like many others and focusing on investing any extra cash. With interest rates this low, right now it makes more sense for us to invest the money rather than to pay down the mortgage in lump sum payments.
The RRSP contributions will likely contribute a sizable tax refund – something that I’d like to use wisely. If we were to simply spend it on household things, the RRSP contributions wouldn’t have nearly as much value – since the tax deduction they generate would be wasted.
I’m hoping to generate a tax refund of about $15,000 – and put at least $14,500 of it towards the TFSA (the $500 difference can be my ‘play money’).
Right now my RRSP account consists mainly of blue chip, Canadian dividend stocks. I’d like to move into the US market by investing in US dividend stocks and further diversify my portfolio.
Related: 5 Advantages of Dividend Stocks
I have no issues with the Canadian markets, but I find most of the solid dividends come from two sources: resources and banks. I’d like to diversify into other industries by investing in the US market.
By the end of the year, I’d like to have at least 10% of the total portfolio invested in US dividend stocks.
Companies that come to mind as possible investments are: JNJ, KO and MCD. However, with limited knowledge of the US market, I’ll definitely need to do more research before I jump in.
What are your goals for the rest of the year?