Life After Debt: What’s Next?

On Tuesday, I wrote a post explaining what life has been like without debt. What I didn’t explain is how guilty I have felt about making even the smallest of purchases this summer. For example, I received a little bit of money for my birthday and decided to buy some new clothes with it. After finding a few great pieces (which I now wear all the time), I spent all of the money ($100) plus another $40 of my own. As soon as I made the purchase, I felt like I shouldn’t have. Why? Because, like I explained earlier this week, I often feel like most purchases are going to overextend my budget. However, I’ve also had this gut instinct telling me to save, not spend.

You should all know by now how much I trust my gut instincts. The first gut feeling I can remember having is the one that told me I was close to being maxed out, which I ignored. Since then, I’ve trusted all of them – from the one that told me to move to Toronto, to the one that told me to move back, and even the one that told me I needed to get sober. I had a really expensive summer, filled with weddings, concerts, etc. so my main goal was just to get through it without going into any debt. But I’ve known all along that I would need to get serious about saving in the fall – and that season is fast approaching.

Last week on my Facebook page, Jordann said:

I’m very curious to know what your next goals are, how you decided on them, and what your timelines are. I’d also be very interested in knowing how you are approaching investing.

For anyone else who is also curious, here are my goals for the rest of 2013:

Emergency Fund: $2,000

By the end of this month, I’ll have a measly $2,000 in my Emergency Fund. I say “measly” because my ultimate goal is to have $10,000 in there – but that’s a goal I’ve decided to put on hold until next year, or until I complete two of the other three savings goals listed below (Regular Savings + Travel).

Regular Savings: $1,000

One thing I’ve been thinking about a lot is having a regular savings account as well as an Emergency Fund. An Emergency Fund is meant for exactly that – emergencies. But I’d like to have access to a little bit of savings at all times too, for any unexpected non-emergency expenses that may come up. I’m going to save $250/month from September through December to make that happen.

Travel: $1,000

Much like how I want to have a little bit of regular savings readily available, I also want to set aside some money dedicated for future travel. Travel could include a roundtrip home to Victoria ($134) or a flight to somewhere new. I just want to have a little bit of money on hand at all times, in case the opportunity to travel comes up. I’m going to put $250/month aside for this, for the rest of the year.

Retirement: 10% of Take Home Pay

I feel sick admitting this but I’ve contributed a big fat $0 to my RRSPs this year. Before, I was contributing $100-200/month on top of the $300+ I was putting into the pension I had at my last job. When I realized how close I was to being debt-free, I stopped saving and focused on paying off the last of what I owed. Now, it’s time to get serious about saving for my future. I had a hard time coming up with the magic number of how much I could/should save, so I’ve decided to start with 10% of my take home pay; that means I’ll be contributing at least $330/month to my RRSPs.

As for investing, that’s something I’ve been thinking about more than anything else lately. And I don’t mean to leave you guys hanging, but I have a little announcement to make next week about that!

For now, that’s that! It seems like a bunch of small goals, but I just want to finish this year and feel like I have my first little cushion of savings and know that I’m saving for my future. If I stick to this, I’ll be saving 25% of my take home pay each month, which seems reasonable to me. Once I have $1,000 in both my Regular Savings + Travel accounts, I’ll start aggressively boosting my Emergency Fund up to my $10,000 goal. I’ll also take some time at the end of December to see where I’m at and reconsider my goals for 2014. For the rest of this month, however, I’m going to enjoy the flexibility of what’s left in my summer budget – that means having my (cup)cake and eating it too!

What do you think of my goals for the rest of 2013?