In my original post Save! Save! Save! Our 2016 Savings Goals I outlined the very ambitious, but doable financial goals that Mr. MMC and I want to achieve by the end of 2016. To summarize, the goal was to save a total of $42,944 in 2016 of which $21,000 was for short term savings/planned spending and $21,994 for long-term retirement savings. Even though 2016 marked the beginning of no debt for us, we also had no substantial savings. So, we decided that having a short term savings goal of $21,000 which would be an adequate emergency fund if things head south. In 2017 however, if all goes well, most of our monies ear marked for savings will almost entirely go towards long term savings…that is the plan at least.
In updating the goals table from my previous post, here is where we are at as of July 15, 2016. The goals are divided into short term and long term goals for clarity.
Short-term savings/planned spending
|1. Emergency fund||$10,000||$10,000|
|2. Vacation fund||$3,000||$ 3,000|
|3. Starter baby fund||$5,000||$ 5,000|
|4. Education fund||$3,000||$ 1,300|
|5. Retirement savings (thru work, includes matching)||$10,776||$4,498|
|6. Tax Free Savings Account||$10,000||$1,869|
|7. Critical illness (self-insure)||$1,168||$448|
As you can see, we are getting close to finishing off saving for our short-term financial goals. This is in-line with our calculations in the beginning of 2016 as we spent the first 6-7 months of this year focusing our efforts on this (while still contributing towards company retirement matching plans). It feels bitter sweet because on the one hand it’s pretty crazy to think that $21k will just be sitting there in safe and boring certificate deposits/GIC’s, using the laddering strategy. On the other hand, the sense of peace and stability in having these monies there is priceless. Mr. MMC and I are in the camp that supports an emergency fund as the first line of defense from life, only once these monies are depleted will we look at other options.
As you can see from the table above we are 92% complete for our short-term savings goal and super excited for the second half of 2016 which would focus more on putting money in investments (both self-directed through our TFSA and group RRSP through our employers).
In terms of our long-term savings goal, we are slowly placing the building blocks needed to get this goal completed. Up until this point we only put the minimum amount required to receive full matching by our employer and squirreled monies away here and there for our TFSA and critical illness fund (for the basis of our critical illness self-insure fund, click here). As you can see we have only reached 31% of our long term savings goals with more than half the year completed. Our plan is to have this number substantially increase as we focus entirely on long term savings goals for the remainder of 2016.
Lastly, I want to highlight some financial success and fails that we encountered in reaching these goals thus far.
- Mr. MMC received a $2k bonus which we partially used to pay off a credit card bill and put the rest towards our short-term savings. This was a nice surprise as we don’t budget for bonuses in advance. It freed up some fun money for us as well.
- In creating our 12 month budget for 2016 in 2015 we did not realize that Mr. MMC gets paid 3 times in June instead of twice. Since he gets paid bi-weekly and I get paid semi-monthly, our pay cheques never line up. This worked out nicely because we had an entire paycheque to put towards whatever we want as we did not account for it. The monies went towards a small LOC debt (which I will explain in the ‘fail’ section) as well as towards our short term ‘furniture fund’.
- The furniture fund is not outlined here because we spent it as quickly as we saved it, but it was in place to purchase furniture and home décor for when Mr. MMC and I moved into a two-bedroom apartment in June. We didn’t need it before. Although the furniture fund was not a financial success per say, the move was as we are saving more on rent each month while getting a larger square footage than our previous place. For details on these numbers, click here
- For the month of June, we were paying rent for two places (our final rent for our old place and our first month’s rent for our new place). We did this for two reasons:
- To allow us to slowly move throughout the month as we could not book time off as we are going on an international trip that will take 4 weeks’ vacation time.
- To ensure we salvage our security deposit from the old place by not breaking our lease.
To make a long story short, $1,200 came from our LOC @2.69% interest to cover the security deposit in the new place, which we have paid back about half now. To make matters worse we received $629 out of the $724 security deposit from the old place after they did the move out inspection.
- Lastly, towards the end of June, we found ourselves eating out A LOT during the week as our utensils and kitchen supplies were in the new place, while our mattress was still in the old place. I haven’t ran the numbers to see exactly how much we might of spent (because I know I will be pissed if I do), but I am guessing anywhere between $400-$500 on eating out those 2-3 weeks.
That’s pretty much my savings update so far. I learned a lot from my moving experience and would do things very differently in the future. Overall, I am happy with the progress we have made.
How is your savings goals coming for 2016, any successes or fails you would like to share?