Friday, December 4, 2009

Des's Financial Journey

Last summer, I started my financial journey as a full time engineer fresh out of school. I moved out of my parent's house and have been living on my own ever since.

This January, I had saved enough to pay off all of my $8000 in student loans I had accumulated during my studies.

After that, I had a net worth of just under $10,000.

I have been on a financial journey this year to learn more about my finances, and how I can work towards a future of financial freedom. I don't need a lot of money in my life, what makes me happy are the simple things.

I enjoy spending time with my family, friends, and now my wonderful boyfriend, LeBlanc.

I love to cook, and I love playing volleyball.

I always seek to learn new things, whether it be through taking a course, reading a book, or just experimenting with new things.

I am learning to live a more minimalistic lifestyle. Basically living with less, but better. I try to apply this principle in the various aspects of my life. I try to live below my means, but still enjoy the things that are important to me, by compromising on things that are secondary.

Growing up in a family where money was always tight, I've grown up watching my parents save every penny. The most important lessons I've learned from my parents is to alway live below my means, and that materials items aren't the things that really matter in life.

Here is a glimpse into my bank account over this year to date.

My Savings
My savings have grown from $5000 (lump sum) to $12,429. I have divided that amount into different sub funds, as follows:
Emergency Fund $5880
Travel Fund $1535*
Freedom Fund $4009
General Savings $1005
*I took out $1400 earlier this year for my trip to Europe with LeBlanc

My Retirement Savings
My retirement savings is split between my ING account and an account with Manulife where I have company matching from my work. I started by putting $1000 into my ING account in January in the Streetwise Balance Fund, and have been making monthly contributions.

In April, I started investing $200 directly from each paycheck into my Manulife account into mostly index funds, and hence, decreased my contribution into my ING account. I started investing more money into my Manulife account because my contribution was not taxed, and my take home pay was almost the same.

Altogether, I have saved $11,003 in my RRSP's so far, as follows:
ING Streetwise Balance Fund $7260
Manulife Account $3743

At the beginning of this year, I was a little overwhelmed by learning about RRSP's, index funds, savings, etc. However, about a month ago, I felt that I wanted to try my hand at investing in individual stocks. I opened up a Tax Free Savings Account (TFSA) and deposited $5000 in it to "play" with.

I invested in 3 stocks that I wanted to hold for long term: Birkshire Hathaway, Loblows and Rona.

Sometimes my stocks go up, and sometimes they go down. The highest balance I held was at $5260 last week, and this week it went down to $5045. I know this is all part of riding the market, and it's too soon to tell. Will report back in 6 months time.

In my checking account: $4780.

My total net worth today is: $33,257

I have one more paycheck this year, with expenses it will be $1445 and an additional RRSP deposit with company match of $470. For a potential balance of $35,172!!!

I have already paid my rent for this month and have about 3 weeks left of expenses in the year. I am so excited!!

Being realistic, I still haven't gotten gifts for my parents and LeBlanc. I don't usually exchange gifts with my friends and sisters, though we go out for lunch or dinner, instead. I also want to treat myself for doing a great job learning about my finances and working hard to stick to a budget. Reasonbly, I am looking at a year end balance of $34,500 after my normal expenses and some holiday expenses.

This is what I have in mind for my treat!

I love MAC makeup and I have been looking to buy some good brushes for a while now. They always have great deals during the holiday season (this set is for $58!), since these brushes usually cost at least $35 each, if you buy them individually full sized.

I love this sweater dress from! Unfortunately they are out of stock and there is a $20 shipping charge to Canada! Ouch! So, I am looking for a super soft, preferably cashmere sweater that I can snuggle up in while looking effortlessly chic.

Note: I am NOT a financial advisor, and these are stories from my experience. Please consult your financial advisor when seeking advice on your investments and financial decisions.

How is your financial journey going??? What are some of the financial goals you have accomplished this year???


Greears said...

HA! I loved your story about the L plateau! It makes me happy that I may have had a slight hand in helping you write that! I am glad that you are happy with LaBlanc. Did he like your story?

Your financial plan is masterful. Look at how you are expanding your money. Do you have a plan for purchasing some of the big things in life? Like a house? I have found that these tangible items in your portfolio made a great deal of sense when you get to be above 40 and my friends and I have been talking about how we wish we would have bought homes in our 20's, "They were so cheap then! Imagine the small mortgage we would be paying!" Of course then we would not be where we are now now would we?

Des said...

Greears - Thanks! There is another story to this, which I will share. I think it's really cute.

The thought of investing in property has crossed my mind, but I am not sure I am ready for such a big step, at the moment. I am happy renting (and I pay very low rent), and saving my money for when I am ready for a mortgage.

Lemuel said...

i randomly came across your blog. enjoyed the music you had and then found my way to your personal finance posts- really good stuff.

I just started some index funds with Vanguard, i'm hoping dollar cast averaging works.