Where to Go from Here: Taking Stock of 2018 and Planning for 2019

Jordann Life

Every January I make a point to sit down and look back on the previous year. I check in with my goals for the year, and then I use my progress or lack thereof to help myself set goals for the upcoming years.

2018 was a little strange for me, because I didn’t set any goals whatsoever. I didn’t set goals because my husband went back to school, which meant that we’d be spending most of 2018 living on one income. I’ll be honest, the idea of living on one income for an extended period of time really made me nervous last year. I just didn’t know whether we would be able to make ends meet on my income alone, which made me go into financial survival mode.

If you’ve never been in financial survival mode, it essentially means that my only goal for 2018 was to limit the financial damage that post-secondary would inflict in our finances. There were two types of damage I was hoping to limit:

  • Debt from paying tuition (probably through a student line of credit)
  • Debt from day-to-day expenses (either credit card debt or line of credit debt)

How I Faired Financially in 2018

Fortunately, I was able to avoid going into debt, despite being the sole breadwinner in our household. When it came to paying tuition, the initial news wasn’t great. My husband didn’t qualify for provincial student loans due to my income and the size of my RRSP.

He did qualify for a student line of credit, but I really, really did not want to use that because we’d start paying interest on the debt right away (provincial student loans are interest deferred until graduation). Fortunately, I was able to withdraw from my RRSP through the Lifelong Learning Plan to pay for his tuition, so the only interest we’re paying is what we’re missing out on from not having that $10,000 in the market.

With tuition handled, what remained was dealing with month-to-month expenses on one income. I wrote in depth about how I managed to pay for all of our expenses by myself, and most of it came down to the fact that I had additional freelance income coming in.

Verdict: I was able to achieve my only financial goal of 2018: to not into debt over post-secondary education.

Go me!

How My Net Worth Faired in 2018

From a net worth perspective, there was good and bad this year, but overall a net positive. On the negative side, I paid out $10,000 in tuition and many thousands more in home renovations (more on that in the next section). On the positive side, my home’s value increased by about $6,000 according to my conservative estimates, and regular mortgage payments unlocked about $7,717 in equity.

Here’s how my net worth fluctuated throughout the year.

As you can see, my net worth was pretty up and down in 2018. Here’s why:

  • March’s net worth dip was due to paying taxes
  • I became the sole breadwinner in May, and also paid $4,500 in tuition
  • I updated my house’s value in July, reflecting August’s net worth
  • Tuition round #2 was due in September
  • A total rise in net worth of $15,593, mostly due to paying down my mortgage and my home’s increasing value

How My Income and Expenses Faired in 2018

While my net worth is a reflection of my finances overall, it doesn’t cover the money that came into and out of my accounts this year. Here are some of the big items I spent money on in 2018:

  • Tuition, books, and misc.: $10,551
  • DIYed New Pergola to Replace Old: $1,200
  • DIYed New Shed: $1,774
  • Upgraded Electrical Panel and Heating System: $5,440

While my net worth didn’t seem to increase a whole lot in 2018, I did shell out for some pretty serious home improvements this year. The new pergola was done in the Spring and replaced the old one (pictured here) that was structurally unsound. The shed was not planned, but the result of an opportunity to take advantage of some free expert labour (aka: my husband’s step father), and was needed as our old $150 Canadian Tire shed was on its last legs.

Finally, the heating system. After spending a summer in the stifling heat of my home office, I decided to bite the bullet and replace the oil furnace with a heat pump. That project was completed in November and was not cheap, but we’ll have central air conditioning in the summer, energy efficient heat in the winter, and we’ve officially ended our dependence on heating oil.

On the income side, 2018 was a very good year for me. I increased my income by 20% over 2017, bringing me within striking distance of a six-figure income. I was able to achieve this by earning a raise (my first in two years) and growing my freelance income by 25%.

While I hit some earning goals in 2018, it wasn’t easy, and I worked a lot. I gave up a lot of my other passions. I’m really, really happy with my performance, but I’ll be looking for ways to streamline the process and limit my hours in 2019.

My 2019 Goals

Now that we’re almost a year into single income life, and the end is actually in sight, I feel little more comfortable setting goals for this year. These goals are not resolutions, but specific, measurable, attainable goals that I want to achieve before the end of the year. Here’s what I’d love to achieve this year:

Money: Pay for Semester #3 and #4 in Cash

In 2018 I paid for my husband’s tuition using the Lifelong Learning Plan, which meant raiding our RRSP. While this is a good alternative to going into debt, I’d rather limit the damage to our RRSP, since that money is meant to be earning interest for our future.

In 2019 I’d like to pay for my husband’s tuition in cash instead. That means I’ll need to scrape together $8,500. Fortunately, I’m off to a good start. I already paid for his January tuition in cash, and I’ve got $1,500 saved for May’s tuition.

Money: Restart Retirement Contributions

When my husband started school I went into survival mode and cut all of our extraneous spending. That meant no more spending on travel, DIY projects (except the one-off projects outlined above,) and no more retirement contributions.

Currently, I’ve got enough freelance income coming in that I can restart contributions to my RRSP. So far I’ve contributed in Jan, February, March, and April, and going forward that $600 will be funded by my freelance income first before other goals.

Money: Beef Up my Emergency Fund

The government shut down in the US really drove home to me how quickly your financial circumstances can change, and that reminded me that I need to grow my emergency fund. It’s been sitting at the same $10,000 for several years now, and this year I want to grow it to $15,000. I won’t be keeping all of it in cash, but the important thing is that it is accessible if shit hits the fan.

I’ll start this process after saving for my husband’s second round of tuition.

Income: Work Smarter, Not Harder

I generally dislike this saying because it was popularized during the push to get more students into university and away from trade jobs, but it suits this particular goal. In 2018 I earned an amount of money that I would be very pleased to earn again in 2019, but with one key difference: I need to work less.

I worked too much in 2018, and that pace was unsustainable. My goal for 2019 is to keep my income stable but reduce the number of hours I spend working. I’ve already started outlining how I’m going to tackle this problem, but unfortunately there is no easy solution.

DIY Goals

In February and March, I spent a lot of time and money upgrading my fireplace to house a wood burning insert. I’m utterly in love with the fireplace, but the upgrade was an expensive process, so it will be the single biggest house related project I tackle this year. I’m still planning to get my DIY on though, Here are some of the projects I plan to tackle in 2019:

  • Strip my office door back to the original finish (in progress)
  • Build a “fauxdenza” in the dining room
  • Build patio furniture
  • Upgrade the front of the house including new gardens and cosmetic upgrades
  • Remove remnants of old shed
  • Repaint/tile/upgrade entryway/mudroom (front and back of house)

That seems like a lot, but the total cost will most likely only amount to a few thousand dollars.

Setting Specific and Measurable Goals

Now that is a lot of goals, but each of those goals are specific and measurable. The timeline is the next 8 months, and I feel that they are reachable during that time. Some of the goals I’ve already made good progress on, such as my RRSP contributions and my husband’s tuition, while others will take consistent effort throughout the year to accomplish, like my DIY and income goals. Either way, it will be easy to see at the end of the year whether I accomplished them.

Have you set any goals for 2019, financial or otherwise? I want to know!