Yesterday while writing another post, I noticed that my net worth at the age of 50 will not be a great one.
It is depressing, which is bitter – sweet. That means I want to do better and I will take some actions.
I just do not know what can be done. If I had not bought my house, I would be in a better shape, but since I know it will require repairs/renovations over time, I am worried. This will be the most challenging part of this planning. On the other hand, I also think that over time paying down my mortgage will become easier as I will owe less and the payments I will make will be mostly towards the principal. It feels like paying of the mortgage as soon as possible will give me quite a peace of mind.
Anyways, I must come up with a better budget and saving plan. I have done well with the budgeting and bringing my chequeing account to a positive balance lately. I am now working on my emergency fund. After that, I will have to find ways to save more and invest for my retirement.
What could make this? I am already having a restricted budget compared to before. I know I can cut some of my expenses too, but will they be enough?
Even a small amount of extra saving will help, I know. My psychology wants big savings, though. What can I do to help myself?
1. Shopping freeze for almost everything, except the clothes and cleaning products till the end of 2016. I am planning to take advantage of the holidays sales. I may as well purchase my cleaning products, in addition to some new clothes, at that time and get over with it. No books, no vacations (except family visits) (well, maybe one or two art work for my home). Occasional books. That looks like the most practical cut of expenses for now. Good.
2. Transportation: Take the bus or walk. Rain or shine. My only hurdle is the morning mood that makes me complain about anything; how can I bypass this long-term habit? How can I find joy in the mornings so that I can be okay with letting my need to have comfort? A miracle is needed…
3. Reducing the weekly allowance to $100; this will cover my grocery and other small daily expenses, such as my weekend coffee at the cafe. It may also include my cab fares should I take cabs. I will not be able to make it at first. I may not be able to make it over the long run – so prepare yourself for frequent rants, dear reader….
4. Mortgage; I am not planning to increase my payments now; maybe in April when I will get a small increase. I may as well put this extra amount into my mortgage. Ok.. sounds like a plan. At least an improvement over what I currently do.
5. Socials and holiday celebrations: Gotta be frugal here; I tend to be generous with the socials and when I am invited somewhere.
Then the question is; what to do with the newly saved funds?
I am more motivated if I can find a measurable improvement somewhere; whether reduction of debt or increased investments.
Beefing up my emergency fund: this is the priority now; I will see it accumulate till it is $8,000.
Increasing my RRSP and TFSA contribution: I will do this at the new year; it will be a small amount but nevertheless valuable to increase my retirement savings/investments.
After my emergency funds are done, I may increase my TFSA contribution a little bit more.
Planning is exciting, writing is useful and easy, implementing is challenging.
I think we all will see how this adventure of mine will go 🙂