I have decided to make both 2014 and 2015, years for saving. There are a few mini vacations that I plan to take with mom and one big one to the US but other than those, there are no splurges on the horizon for me. The 30th High School re-union is sort of expensive but only for two nights at a luxury resort. That's not bad.
I would like to accumulate as much money as I can in my savings account for the next two years. Why?
1. I need to re-do the entrance, the kitchen, the flooring and I need to change the doors in my apartment. This is going to be a very big expense. It is definitely a need and not a want. I am hoping to live in this apartment for as long as I can. The kitchen needed an update even when I bought the apartment but, I held back.
2. I need to start a car fund. My 2010 Nissan Note is at 86,000 Km. I am hoping to drive it for as long as it is safe but I do not know how long that will be. Therefore, it is wise to start putting away money for that. I am hoping to keep my current car until 2018 if not more.
3. I need a vacation fund.
I am currently putting the maximum amount in my retirement account that is matched by 25% by the Government. So, my savings toward 2023 are consistently growing.
I am targeting to keep enough money in my Emergency Fund to cover my expenses for a full year. I am halfway there. I already have a fixed amount of passive income. I calculate the difference between my budget and my passive income and come up with the EF number. I usually add another 10% to be on the safe side. Why is my budget exceeding my passive income? Because I have the rental property debt and some other payments.
By May 2014, I will be done with the rental property debt and the installment type payments. That is quite a chunk of money. I am hoping to set up the above 3 funds with that amount.
By June 2023, at the age of 56, I would like to rely solely on my passive income at that time and be financially independent. I am going to put every effort into making this possible.