Is it too early for New Year’s resolutions? Well, I’m going to tell you what mine are anyhow! I only recently came to the realization that early retirement was a real possibility for me. And I think that’s why I’m thinking about resolutions: because these resolutions will set me free even earlier!
My first resolution is to get my finances in order. I’m not talking about paying off debts: I don’t have any. I’m talking about being a little more organized when it comes to managing my money. I’ve always been good at saving money, but I’m also good at throwing money away by not strategizing.
About two years ago, I finally made the decision to move all of my money into dividend-paying stocks, and to DRIP everything. The problem is that I’ve always done all of my investing in a taxable account. A pretty bad decision, of course, because I’m losing money to taxes. I’ve just opened a Tax-Free Savings Account-better late than never! I still need to get some paperwork to the bank before the account is officially mine, but I’ll be taking care of that next week. Then I’ll move all of my REITs over.
I’m also going to start putting money into my RRSP again. It’s been years since I’ve touched my RRSP, but I’m going to have to put some money in this year in order to avoid getting hit on my taxes in April. My dividend income is up $6000 from last year, and I’ve taken about $7500 in capital gains. So I’m a little nervous about income tax time!
My second resolution is to continue downsizing and decluttering. My goal is not to be an extreme minimalist, although I do envy people who have so few possessions that they can fit them all into a couple of bags. But I want to get rid of things that I don’t need or don’t use. The hardest part will be getting rid of things that have sentimental value. The big challenge will be to part with my Cabbage Patch Kids. I got seven of them when I was a kid and they’ve always been the one thing I thought I’d always hang on to. But then I remember something that I’ve heard various people say at various times: we spend most of our lives accumulating stuff, and then we give it all away when we reach old age. Those dolls will all end up in someone else’s possession eventually, so it might as well happen now. And I have to remind myself that they really are nothing but cloth and stuffing!
My third resolution is to track my spending a little more, which I hope will help me decrease my spending. I used to track every penny I spent. It was especially good at helping me with my grocery budget. I quickly memorized all the regular prices for items, which meant that it was much easier to spot a deal. I go to grocery stores now and I have no idea if a store is overcharging or undercharging.
Tracking my spending will also show me how much I’m spending on unnecessary items. I went to the grocery store today and stayed out of the bakery, ice cream and junk food aisles. And I spent a few dollars less than I would normally spend. Imagine how much money I could save if I stayed out of those aisles every time I was in there. And how much that money would grow if I put it into dividend-paying stocks and let it compound!
So those are my three main goals for 2018: to track my spending, to organize my investments, and to get rid of things that I don’t need. The first two goals should help me bring my projected dividend income up to about $13,500 by the end of 2018. And the third goal should help me out mentally. Less physical clutter means less stress, which should mean less spending!