Year 1 Update of 5 Year Financial Plan

Time just flies by because it now been a year since I share my financial plan with you guys. And I thought it would be fun to do a little update see where I am now with it.

If you’re new here first go read my five year financial plan then come back here.

To start things off I want to say a year ago I thought my financial plan was really good. Looking at it now it seems pretty flimsy.

Basically I said I going to increase my income streams and have some passive income. I don’t know how but this is what I want to work towards.

Anyways a year has passed now so I thought I would share how much progress I made towards my goals.

Like I said earlier the overall goal for the five year financial plan is to increase my income streams and make some of them passive.

I’ve also broken that goal down a bit further and specific goal for year one was to have three income streams of which two are passive.

I only kinda hit this target. I do have a couple of income streams through none of them are really passive.

So my first and biggest income stream is still my day job I did get a raise since first writing my financial plan so I have improved this income stream to some extent.

My second income stream would be cleaning which I do a few times a month this is something I started doing this year and it is a good source of some extra cash.

And then here where things get fuzzy. Those two above are the only consistent income streams that I would count as income.

There are two more that are kinda earning me money but I don’t really count it as income.

Interest on my bank accounts. This is something I did paid attention to the last year and I did my best to optimize my accounts to earn the most amount of interest possible.

It is constient and I earn probably about $7 a month so it a not a lot. Most of this interest is earned on my emergency fund and I keep it in my emergency fund. Not really income as I can’t really spend that money on anything else.

Earning on my investment accounts. The other kinda income stream that I don’t include is earning on my investment accounts. Because once again any money I earn get reinvested.

My investment accounts are also in a tax shelter plan so I don’t pay taxes on anything until I take the money out.

Throughout the past year, I’ve also had money coming in from little stream like people paying me back and I sold a few things.

Did I meet my goal? Not really.

I only have two consistent active income streams. The other two more passive ones I think are too little to count as income.

I’ve also included some smaller goals with my financial plan. Because why not?

In regards to these ones my income has gone up by quite a bit since making my financial plan. My net worth has also gone up substantially.

Another smaller goal I had was to make $100 outside of my day job. I definitely hit this goal with cleaning.

A random goal I include was to increase my saving rate to 50%. Looking back I feel like I made this goal because it sounded good and it seems like a good goal.

Since I basically included this for looks I haven’t really be trying to reach this goal.

The funny thing is when I look at how much money I put toward my saving goals as compared to something else I have come pretty closed to saving 50%.

But I don’t think it good to focus on percentages when it comes to saving. It better to focus on other things like the actual amount of money you’re spending and whether or not you can cut that back.

It also good to look at what you’re saving and whether or not you’re reaching your goals. Maybe you need to save more.

This is why zero based budgets are great they focus ono your actual money that you’re spending and that your saving. You can learn more about budgets here.

I made not have reached my exact goals with my financial plan this year but I still would consider my progress a win.

I have learnt a lot about finances. I managed to increase my income. Max out my TFSA. Set up regular contributions to my RSP. Have a full emergency fund.

I have clear saving goals which I’m working towards. I’m able to give on a regular basis and for the most part, I’m not overspending and are happy with where my finances are.

Compare to a year ago at this time where it seems like my income was trending downwards. I felt like I was overspending a lot. And I couldn’t seem to make any progress with my goals. I’m really happy with where I’m at right now.

So make a financial plan or some sort of goals but work on improving your finances.

It can be hard at times but you will get better. And things get easier. They really do.

Start working towards your financial goals today.