I cannot believe 2016 is almost over. This year has gone by so quickly. With only 3 months left to go, I am in the final stretch of our 2016 savings goal of $42,944. I had decided to let the rest of the world know about our savings goal to keep us accountable. I had also documented my progress for the first and second quarter.
So let’s get right to it.
Short term savings/ planned spending
These are planned spending that will take place within the next 5 years or so. Monies in these accounts are in a savings account and GICs/CDs. We use the GIC/CD laddering strategy to take advantage of higher interest rate offers when they are available. We had a promotional offer from our long time online bank that offered us 3.25% for 6 months on all savings accounts. This promotional offer ends Sept 30, 2016 but we are glad to have been able to take advantage of it.
The biggest hurdle we faced in the beginning on 2016 was funding the emergency fund. This pretty much took the first 3 months of 2016. More about what happened to this amount in the explanations below.
With the first 2-3 quarters spent on funding short term savings/planned spending accounts we thankfully are only left with $1,923.20 left to complete this goal. This will allow us to concentrate on funding our long term savings/financial freedom accounts.
|1. Emergency fund||$10,000||$8,066.46|
|2. Vacation fund||$3,000||$3,000|
|3. Starter baby fund||$5,000||$5,010.34|
|4. Education fund||$3,000||$3,000|
Long term savings
Monies in long term savings are geared towards retirement/financial freedom. These monies are all invested in the stock market with an aggressive growth portfolio for my husband and a moderately aggressive portfolio for me.
Although $10,493.37 is a lot to save up for in the 3 months, we have the added benefit to focus on long term savings for the remainder of 2016. This amount also includes employer contributions which will help us in reaching our goal faster.
Come 2017, our goal is to direct 85% of our financial savings towards long term goals. The other 15% would be to replace planned spending when necessary like replenishing the emergency, education and vacation fund when needed.
|5. Retirement savings through work (includes matching) (invested)||$10,776||$7,278.67|
|6. Tax Free Savings Account (invested)||$10,000||$5,610.99|
|7. Critical illness (self-insured) (invested)||$1,168||$922.85|
|Total Savings Year to Date||$42,944||$32,450.63|
- Emergency fund: We had the emergency fund fully funded at $10,000 in the first quarter. However, an emergency caused us to dip into this fund spending $1,933.54. One emergency involved using arm & hammer laundry detergent that shrank a bunch of our work clothes by like 4 sizes. This resulted in an unexpected, yet not unwelcomed “shopping spree” to replace some of these clothes. We are currently on track to replenish this amount by the end of the year.
- Vacation fund: My husband and I enjoyed an amazing holiday in Jasper and Waterton, Alberta. We stayed in a hotel for the 6 nights (paid for in advance of course through Expedia). We did a lot of hiking, swimming, sight-seeing, vegging out and relaxing at the hotels. It was our first vacation since we started our $120k student debt repayment journey 3 years ago. Our next 2 vacation goals is to save enough to visit my family in Africa next year and take a two week trip to Europe in 2018. More about these goals in 2017 posts. Although we had funded this $3k, we have used up this money and it was totally worth it.
- Starter baby fund: Pretty self-explanatory. The 3.25% interest rate we have been enjoying has boosted the $5k amount pretty quickly in a short period of time.
- Education fund: Although I am currently taking a break from studying right now, my husband is working towards his CFP designation. His employer reimburses for these expenses but that can be months down the line after reaching certain company milestones. When he does get reimbursed we put the reimbursement cheque towards long-term savings. Out of the $3,000 saved we currently have $900 left for education costs.
- Retirement savings through work: We are on track for reaching this goal as these monies are deducted at source from our employer.
- Tax Free Savings Account: These are after tax dollars invested to help us reach financial freedom. Because these monies are not deducted at source, discipline is needed to ensure that we save. We are past the half way mark in reaching this goal which is good, but we still have a long way to go.
- Critical illness (self-insure): This is to supplement our term to 65 life insurance policies without having to pay our life insurance provider for critical illness coverage. To read why we decided to self-insure for critical illness check out my previous post. We have this amount set for automatic monthly withdrawals and the funds are invested as we have a long term horizon for this goal.
We have $10,543.37 left to save over 3 months. That sounds pretty ridiculous when I think about it, but I also feel like it can be done if we remained disciplined. At 75% of our 2016 savings goals reached, we hope to be on track for reaching 100% by the end of the year.
The final quarter is an opportunity to kick our long term savings into high gear. This is where I feel we will see our net worth grow as we continue to save and invest.
Overall, I am happy with our progress.