Yesterday was a special day. Well, it wasn’t that special, but it was special to me; it was my birthday. Nope, I haven’t turned 30 yet… only 29 ;-). But being so close to 30 got me thinking about my goals and financial planning. Funny enough, I create financial plans for my clients daily but I have barely touched my own so far. Turning 30, it is now time to talk about serious money management.
In part 1, I want to talk about what I want to do before I turn 30. There are a few financial goals I want to reach before I reach 30 so I can make more plans. In fact, 30 is a big number for me but not because I feel old, but because it tells me that I am not young anymore and that I have to seriously think about retirement.
Escaping from a few debts
The funny part is that when you reach 30, normally you have bought or are about to buy your first house, you have or about to have your first offspring and you have or are about to land an interesting job.
I bought my (third) house, got married and have (2) children before hitting 30. I already have a very interesting job and I am financially stable. This is the fruit of hard labour. However, at 30, money is required for several projects at the same time:
– RESP for kids
– RRSP for retirement
– Mortgages and car loans
– Renovation (garage?) and vacation (going south with the whole family is pretty damn costly!)
This is why I’ll be trying to get rid of my low interest rate balance transfer credit card before I turn 30. I’m already paying off my car loan at a good pace but I would like to benefit from low interest rates to reduce my mortgage a little bit.
Paying down more debt during the upcoming year will be a great challenge since I am really in the mood to enjoy life with my wife and kids and benefit from the results of my sacrifices.
Stabilizing my income
I have been increasing my income steadily for the past 7 years (since I started working). While I reached the 6 figure income mark last year and I will be making more this year, I would like to make sure that I can count on such an income level for several years. This is why making even more and diversifying the sources of my income will guarantee that I can count on a steady 100K per year for several more years to come.
In order to achieve this, I have to work on my network at the bank to make sure I maintain my level of annual bonus. Having a strong development plan will help me reach my objective and maintain a high level of bonus for a third year in a row. Since I can’t count on a major raise next year, I’ll depend on my bonus to reach 6 digits on my Notice of Assessment in 2011.
Working on my company will be the other part of stabilizing my income. While I don’t plan to take much out of it, I want to make sure that the company is generating enough money to pay my day off at the bank while continuing to grow.
Generating more cash flow in my budget
The last point will be a combination of the 2 other points above; making more money, paying off debt and freeing monthly cash flow.
At first, I will use all my extra income to pay off more debt (snowball effect). But next year, I’ll know that I’ll need this money for other projects. Turning 30 will definitely affect the way I see my personal finance. After all, I will only be 25 years away from retirement ;-).
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