Goals Based Planning

I recently completed the two modules of Canadian Securities Institute training (Personal Financial Services Advice and Financial Planning 1) that qualifies me to apply for a Senior Account Manager position - when one becomes available in my region.  Since I am LONG finished with being mobile for work, this tightens the circle of where I might be willing to work to three branches of the bank I work for, or, if the offer was REALLY good, any of the other credit unions and / or banks within about a 20 KM radius.

While I was in the final stages of the Financial Planning (1) course, our branch's Financial Planner completed some more of her training and offered to do some goals-based planning with me.  In order to do this, I was asked to consider some financial goals I would like to obtain, and I was given a list of things to gather together so that she could review my current state and then help me put together a plan to reach my goals.

The cool thing is that I recently sat down with one of my other colleagues and he helped to put together something called a Financial Needs Assessment for me. The Financial Needs Assessment was to help me figure out if retirement at 55 was going to be responsible.  The good news is that I CAN retire at 55 on a very reduced pension, as long as my mortgage is paid off.  The bad news is that, based on my current salary and savings, if I choose to do that things will be VERY tight - even considering no mortgage payments. Something that my colleague pointed out to me (that I did not consider) was that though I could manage it, there would be no savings to do things like buy a new car or cover emergencies, should they arise. He fleshed out assessments for ages 55, 60 and 65 and at the end of the day, his recommendation was that 60 is a more responsible target if nothing changes in my financial picture.

Thankfully, my financial picture will continue to get better. The closer I get to my desired retirement date, the closer I will be to having my mortgage paid off.  Once my mortgage is paid off, everything I have been laying into my mortgage can then go into savings - the savings that will be needed to fund the emergency account and the new car fund.

Anyhow, back to the offer of Goals Based Planning made by my Financial Planner. I've managed to collect almost everything together that she needs - I'm still waiting on one document (which is probably in my mailbox right now, to be honest) but what I haven't actually done is put together my list of goals.  Retirement is obviously one of them, a new car and an emergency fund also need to be on the list.  The homework now will actually be figuring out what I will need for a new car and what would constitute (for me) a comfortable emergency fund.  

The primary consideration should always be having that emergency account set up and funded. The standard recommendation is that a person should always have 3 to 6 months' worth of income laid aside in case anything should happen to interrupt the income stream (loss of employment or an injury making it impossible to work, for example) Generally speaking, what people need to determine is what that number should look like.  I guess to be safe I should look at having 6 months' worth of (after tax) income set aside to cover expenses and so forth.  So I guess that creates goal number 1 for me: 6 months' worth of after tax income in an emergency fund account. That means somewhere between 10 and 15 thousand dollars.

The second goal will be to buy a new car.  My car is currently 8 years old - and though it runs like a top and I am maintaining it as required, I can probably count on having to replace it in the next 5 to 7 years.  I'll hold out as long as I possibly can, of course, but realistically speaking, I am going to have to replace it some day and if I can plan to have enough money set aside in 5-7 years to pay for a new car, then I'll be ahead of the game when it needs to be done. I did a little research on line and the average price of a NEW car (off the lot) this year was a little over 25 thousand.

Considering that I am currently only able to put aside just enough money to cover my annual insurance and property tax monies, well, coming up with 35-50 thousand dollars is a very scary thing.

Or is it?

If I look at the full 40 thousand, and I look at a 7 year time-frame I'm looking at about $275 a pay. That amount doesn't take into account any income or growth.  If I were to look at a conservative to a very conservative approach,  and considered a 6% growth per year that would actually make my bi-weekly contributions look a little more like $160 per pay.

I have found that breaking things into much smaller pieces makes them a lot less daunting.

Now, for the good stuff... with the recent completion of those courses, and the fact that I now can qualify for a promotion - when one comes in I can count on an incremental raise of between 3 and 7 thousand dollars a year - yes, before taxes, but after taxes, that could mean anywhere between ninety and two hundred dollars more per pay cheque - and BINGO - there is my savings requirements met!

OK, I should probably get off the computer and get things ready for my week ahead!

With love across the waters...

Actually Yes, I Can!

People are notoriously hard on themselves. We constantly tell ourselves that we cannot do things.  We believe we are not capable of doing something because we aren’t skilled enough, smart enough, rich enough, strong enough, capable enough – well, you know, this list of “why not” goes on and on and on.

 

We are so good at stopping ourselves from doing things for fear of failure that we forget that, without trying to do something new, something harder than we have tried before, something that could lay us open to ridicule and contempt, we miss out on the opportunities that could MAKE us stronger, smarter, more capable, more skilled, richer, happier and more fulfilled.

 

OH – and we make excuses (lots of them) for why we don’t have the time to try.

 

So how do we change things? I don’t have the answers for this one for anyone other than myself, but I’ll tell you my internal scripts that help me not only take those first steps, but also the ones that help me move through the fear of failure.

 

The first one (and for me the most dangerous) is this: “How hard can it possibly be?”

 

How hard can it possibly be got me into running - which I ended up loving in spite of myself - and miss terribly. It got me into riding a bicycle again after nearly twenty years.  Again – something I love. It got me into trying to do things in my home – things like pulling off drywall, pulling out carpeting and has started me learning how to refinish old things.

 

Yeah – this is the one that seems to get me into the most trouble.  But honestly, once I’m in it, it is also the one that keeps me going and helps me get to my second script – which is “I can do *anything* for 5 minutes.”

 

It’s true. I can to anything for 5 minutes – and I started using this script when I was learning to love running. I was miserable and cold and in pain and couldn’t see how I could ever possibly love running – EVER.  Runner’s high was a delusion.  Running outside in Toronto at -30*C was insane.  That was it – runners has to be crazy – I’d see them out in the snow and rain and wind and they seemed to be enjoying themselves – that IS crazy, isn’t it?  What got me through was me telling myself, with every single step, that I am totally capable of doing absolutely ANYTHING for 5 minutes – its only F I V E little minutes!

 

And it worked.

 

The thing I am struggling with right now is RE-STARTING good habits. I have back-slid with diet and exercise – I’m feeling sluggish and although my mental state of being is great right now, my physical one is not where I want it to be.  I need to set myself some SMART goals, write out those intentions in red pen, focus on positive outcomes and ask myself: “How hard can it possibly be? I can, after all, do anything for five minutes!”

 

With love across the waters,

The Hardest Part

I work on a permanent Tuesday to Saturday shift at work – so my weekend is Sunday / Monday. I don’t think I am alone in this… but I have the worst time trying to get myself motivated on Sunday mornings to get anything done. 

There’s usually the attempt at sleeping in – aborted by the dog needing to go outside which is immediately followed by the cat – freed from the dog’s oppressive presence on my bed - who needs to climb up onto my chest, lie there, make bread and tell me all about her hard life with purring and much meowing.

After that, I’m usually having coffee and reading or maybe trying to catch up on computer-related reading of some sort.  Then breakfast or at the very least something to stave off hunger (this morning it was fresh mango with vanilla yogurt – yum!) and some time around 10 or so I start thinking I may need to get dressed and actually try and get something in the house done.

Today the skies are grey and overcast -0 but rain isn’t scheduled to start until this evening, so really and truly, I should be dressed in yard work clothing, with gloves on my hands, kneeling in my grass digging up some of the (what seems to be) hundreds of dandelions that are in my back yard.

The hardest part is actually getting dressed and getting started.  It isn’t that I don’t want to get out there and get something done before the rains start… it isn’t that I’m still tired or sore or anything else that I could use as an excuse to NOT go outside and do something… really and truly, the hardest part is the getting dressed part – it means that my Sunday morning ‘lie around” time is over and that I have decided to Get Things Done.

It’s very nearly 11:00 AM now… I am still in my robe and slippers.  I really need to get dressed and get out there. The rain isn’t going to hold off forever – and I really do want to get out and get at least something outside done… and if I stay inside, in my robe, on the sofa… well, nothing will get done!

OK – it’s time.  I am going to Get Things Done.

With love across the waters,