2018 Annual Review

Back in October, I posted an article outlining my financial goals and objectives for 2018. In that article I committed to posting a year-end wrap-up outlining my successes, failures, and progress in achieving those goals with my final post of 2018.

And since today is the final Saturday of 2018, it’s time for that review.

The primary reason that I committed myself to doing this was to establish and maintain an added layer of accountability I want this blog to bring to my management of my personal and family finances.

As I outlined in the October post, I follow a process similar to that of one of my favourite writers, Chris Guillebeau (author of the blog The Art of Non-Conformity, books like The $100 Start Up and Side Hustle, and host of the podcast Side Hustle School).

While reading Chris’ blog many years ago, I learned about his process of conducting an annual review and making plans for the coming year. I started loosely following a similar process, taking a few hours over the course of a couple of weeks in December to review how the outgoing year had gone and make plans for the year ahead.

Over the years I’ve refined my version of this process and have arrived at five categories of goals and objectives that I focus my attention on: Family, Finances, Health, Personal, and Professional.

Today’s post is a look back on 2018, while next week’s post will focus on what I hope to achieve in 2019. Since the focus of this website is intended to largely be on the financial impacts we encounter as parents, I’m only going to focus on that category in these posts.

To recap, my goals for 2018 were as follows:

  1. Contribute $2,500 to each child’s RESP.
  2. Increase my RRSP contributions by 10%.
  3. Put $2,000 in my TFSA.
  4. Maintain our mortgage prepayment plan.
  5. Reduce discretionary spending by 10% (both personal and family).

So how did I do? All told, not bad at all!

  1. Contribute $2,500 to each child’s RESP. ACHIEVED!

The Canadian government offers very generous grants as an incentive for saving for a child’s post-secondary education. 20% of annual contributions to an eligible RESP are matched to a maximum of $500 per child.

If you can show me another investment that will earn an automatic 20% return, I’d love to hear about it!

FM and I are firm believers in the value of an education and we want to do our part to ensure our kids have the opportunity to pursue college or university studies in the future. So maximizing the government grants became an absolute no-brainer financial priority the moment we entered parenthood.

This year we were able to achieve our goal of getting the maximum amount into the Family RESP account I set up, turning our $5,000 contribution into a $6,000 balance toward our kids’ continued educations.

You’re welcome children!

Aside: if you’re a parent and you’re not familiar with the ins and outs of RESPs, Gail Vaz Oxlade’s Saving for School is a great (and very affordable) resource!

  1. Increase my RRSP contributions by 10%. FAILED

Last year I managed to get $5,200 into my RRSP, so this year’s target was $5,720.

When FM went on maternity leave in April, we hit the pause button on our usual automated RRSP contributions. The intent was to ride out the year, push as much as we could into our high-interest savings account, and make lump sum deposits into each of our RRSPs from that balance at the year if we could.

Unfortunately, we ran into some rather large, completely unexpected expenses this year (mat-leaves are a great time for those, right?) and I ended up contributing less than $1,000.

In hindsight, this was a poorly thought-out goal. At the time I set it, I must have thought it was achievable, otherwise I wouldn’t have included it. That, or my math was simply horrendous and/or not double-checked, which is entirely possible.

Because we also reduced our adult allowances to account for the lower income inherent to maternity leaves, I would have been hard-pressed to match last year’s contributions, let alone increase them by 10%, even without the unexpected expenses we encountered this year. Lesson learned.

  1. Put $2,000 in my TFSA. ACHIEVED!

While I typically prioritize RRSP contributions in an effort to use up all of the remaining available space, when it became apparent that the RRSP contribution goal was unattainable, I focused my attention on achieving this objective rather than failing at both. This shift in my attention allowed me to achieve this goal of contributing $2,000 back in September, though I didn’t get anything more than that set aside.

  1. Maintain our mortgage prepayment plan. ACHIEVED!

We’ve been as aggressive as we can afford to be in paying off our mortgage since it’s the single biggest obstacle in our pursuit of financial independence.

In 2017, we paid the maximum of 25% on top of our regular accelerated bi-weekly payments, plus another $100 in lump sum payments on the principle every two weeks.

Not only did we maintain that pace in 2018, but we upped the lump sum payments on the principle by another $25 per bi-weekly payment!

  1. Reduce discretionary spending by 10% (both personal and joint/family). ACHIEVED on the personal side, FAILED on the family side.

“Kids are expensive” is part of the tagline of this blog for a reason. I’m constantly looking for ways to cut down on our costs, but even the best of efforts and intentions couldn’t get the bills down this year on the family spending end of things. In the end our spending went up very marginally (<2%), which is something of a feat in and of itself, considering we had a second child to tend to for the majority of the year. But the goal was a 10% reduction, and we didn’t come close to that, so we got a failing grade.

On the plus side, I did manage to keep the spending of my adult allowance in check this year, coming in at nearly $300 less per month than I had in 2017. I attribute this largely to the fact that with two kids occupying most of my non-working waking hours, I simply didn’t have an opportunity to spend this year. I missed both my usual May long-weekend fishing trip, and my annual November sports trip with my buddies this year in order to be at home with FM and the kids. I also didn’t spend a lot of time – and therefore money – on my hobby of collecting hockey memorabilia and cards (I’m an overgrown child, I know). Add those things up and a significant decrease in spending was a sure thing.

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So when I tally it up at the end of the year, I achieved 3.5 out of my five goals and objectives. When I consider how much things can change over the course of twelve months and how unpredictable parenthood/adulthood/life-in-general can be, I’m quite pleased with this achievement.

I’ve already established what I plan to tackle in 2019 in each of the five categories that I focus on. Next Saturday, I’ll post my five financial goals and objectives for the year.

Do you set specific goals (financial or otherwise) for yourself each year? How did you do in 2018? And what about conducting an annual review – is that something you do as well?

Let me know by posting a comment, shooting me an email at frugalfatherblog@gmail.com, or by connecting on social media on Twitter, Facebook, or Instagram.

Until next week, thanks for reading!

Frugal Father

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