Time to stash the first big haul in my treasure chest! This year will mark the first that I am getting steady (non-co-op) pay for the whole year! Meaning I can make solid predictions on my income. Furthermore, using the data from my guaranteed monthly expenses and my overall spending habits from 2019, I can also hypothesise my expenses for 2020. Putting these income and expense estimates together gives me an idea of what my trove could swell into by 2020’s finale. If I have a plan and stick to it that is. Thus, it is time to plan my 2020 financial goals!

The mission:

Firstly, straight outta the gate: my two main financial goals for 2020 are 1) To save $30,000 of my take-home pay 2) To spend ≤$10,000

Having two separate goals on opposite sides of the coin gives me more flexibility and the chance to still hit one even without the other. Realistically, the spending restriction is much more challenging; there’s no way around spending money (unless it’s someone else’s money I guess…). On the other hand, it is viable to work extra to pick up the loose change in savings at the end of the year or sell items for extra money.

Overall, what I like about the spending challenge is that it causes me to evaluate all my expenses with a very strict eye. I know if I take the appropriate measures, I can achieve this frugality; however, it is close enough to my base expenses that I’m tethered from extravagance.

My situation at the beginning of 2020:

Getting right to it, I added up what I know will be charging me monthly fees and then added the items in that I expected to pop up as necessary spending. This broke down into:

• Rent $200
• Groceries ~$200
• Car insurance $130
• Phone $60
• Crossfit $100
• Gas ~$35

Therefore, my base monthly expenses can be an expected $725. Hence, my base expense for the year if nothing changes will be $8,700.

Of course, I am hugely benefiting from “family-discount” renting. Sure, it’s not as glamorous as saying I have my own home or am renting an apartment that’s owned by someone I don’t know; however, why would I want to be drowning in mortgage payments and maintenance costs right out of school, or live in a stranger’s house and pay much more rent?

The rest of that list is pretty standard. Gas is low but gym membership is high. Because I drive so minimally I’m betting on minor maintenance needed on the car this year and did not factor in a cost for that.

Battling my expenses:

Considering my aim is less than $10,000, I’ve only provisioned for $1,300 of wiggle room for my financial goals based on these numbers. What a gloomy year ahead of doing nothing so that I don’t spend anything! Or so I thought at first. This is decidedly extreme, and I worried it would not be worth the reward if I have to sacrifice all opportunities coming my way that have a price tag. What I opted to do was see if I could shrink or eliminate these few consistent expenses I have.

Housing:

Rent is going nowhere. It is already a blessed dream I have boundless gratitude for.

Groceries:

Groceries could be noticeably reduced. They are a tricky one to nail down. Some outings will cost half as much as others depending on what is on sale; what needs to be replenished; which store we visit. We are prevailing though! Looking for the cheaper options and bulky non-perishables has paid off big time. Meal planning has also helped a lot.

I’ll provide a detailed post later about how we manage our grocery runs. At this point, we’ve been around $150 each for the first three months of 2020; however, in this first week of April, we had to do a big Costco haul for long-term items that had run out; that plus our regular grocery pickup was a whopping $225 each. Needless to say, I would like a monthly average around $150 on groceries by the end of the year. This would equal a $600 saving compared to last year. The hardest part will be in the summer once all the wonderful fruits are drastically more tempting.

Vehicle:

There is a huge car insurance success story to tell! I was not pumped about paying $130 every month to have my car sitting in the driveway all except maybe 6 days per month. Thus, I decided to look around for other options. I ended up getting a startlingly lower quote because of how little I drive. Then, I was able to use this quote to greatly reduce my package with the insurer I am already with, as it is a family plan and there are many added benefits that we all get versus if I went on my own.

Presently, I am clocking my kilometres for this year to see how many I end up with; if I drive extremely low numbers I may switch next year to a pay-as-you-go plan depending how much I’d save. Ideally, I’d like to go car-free, but I’m not ready to commit to that yet. As it is, I was able to drop my package to $80 per month — that’s almost a 40% decrease in cost!

This year I have spent a total of $52 on gas over three months… Biking wins! I am not naive to expecting summer road trips won’t ramp this cost up, but for now I am living with scant emissions. The fact that I have ridden my bike to work every day of 2020 so far makes me believe I’ll be just fine continuing in the warmer weather. Having a handle on transportation costs is going to be huge on completing my financial goals.

Phone:

The phone was easy to knockout after the fact. Making the decision was killer though: I can’t believe how much needless loyalty I had to my original provider. It wasn’t until the deed was complete that I realised how easy it is to switch around plans and providers to save myself from the crazy big-name Canadian plans. I ended up switching to a different provider for the same plan but at $25!

Gym membership:

Bloody Crossfit. Honestly, Crossfit boxes have been my favourite place to spend time ever since I was introduced to the brand. I had always used this as a reason to keep up with my membership: it was worth it for the happiness and gains.

What I noticed since I began full-time working though, is that I have a lot less flexibility with my schedule. The prime hours of my days are now spent preparing for work and being at work (no wonder I strive for financial freedom…). This made it feel more like a chore trying to fit the certain classes I could make into my schedule so that I didn’t waste my money. If it was cheaper, I’d go back in a heartbeat. As it is, I’m using this year to see if I feel having the higher financial gains early in life to put towards more freedom later is worth the trade-off. It will definitely help this year’s financial goals.

Victory is in the air:

Finally, at the end of all this expense flaying my months now look like this:

• Rent $200
• Groceries ~$200
• Car insurance $80
• Phone $25
• Gas ~$25

Because it is early in the year I don’t have enough data to confidently put groceries at ~$150; therefore, I won’t bank on that expectation compiling numbers. Regardless, my guaranteed monthly expenses have now dropped from $725 to $530. That’s an extra $200 of leeway per month I have for handling curve balls or personal purchases! What a difference and lessening of pressure. Consequently, if all remains true, this will add up to $6,360 by the end of the year, providing me a much needed buffer. My financial goals are forthwith much more feasible considering the slash I made in these expenses.

Regarding my saving goal, I am looking at around $40,000 in pay after my taxes, pension contributions, union dues, etc. Therefore, by sneaking under my spending target, I should automatically lock-in the $30,000 gain; otherwise, I will have to pick up some extra work to level out the difference.

Later, it will be interesting to look back as the year comes to a close many moons from now. These are formidable numbers to hit given the limited room for error. I’m curious to find out what my circumstance will be by the end of 2020. Additionally, what ensuing changes I can embark on in next year’s financial goals. This initial challenge is to set a difficulty benchmark for me to use for evaluating future financial missions.

I hope you are inspired to create your own financial goals now that you’ve read this. Please share a money goal you have for this year, or advice to give others, in the comments below. Alternatively, please feel free to contact me personally through my contact page.

Let’s get it!