Personal Finance Review 2023

Personal finance review 2023 — Recap of my financial goals for 2023. Sharing if I achieved or failed my personal finance and investing goals. I am not a licensed investment advisor and this post is not investment advice. All opinions are my own. Please note this post contains ads by Monumetric and one link to Wealthsimple.

Welcome to my 2023 personal finance review.

In the interest of accountability and transparency, I have been writing a financial recap for the last few years.

I wanted to fit this review into my financial goals for 2024, but the post would’ve been too long. It’s already around 3000 words.

As such, my financial review is getting its own blog post. I will try to keep it brief, though.

In this blog post, I will recap each of my personal finance and investing goals from 2023 and share if I achieved or failed.

Let’s jump right into the review.

In case you missed the blog post, you can read my financial goals for 2023 here to get acquainted with the goals.

Goal # 1 — Earn $1400 In Dividend Income (Achieved)

My primary goal in 2023 was to earn at least $1400 in dividends during the year.

Fortunately, I was able to exceed this goal, as I earned $1497.18 in 2023. You can read the final dividend income update here.

Admittedly, it was a slower year for dividend growth, following the purchase of my first home. I was only aiming for 3.7% year-over-year growth over the $1350.22 in dividends received in 2022.

But thanks to a higher income and savings rate in 2023, I was able to achieve an 11% year-over-year dividend growth rate. It’s still a lower dividend growth rate in the grand scheme, and it would have been nice to top $1500. However, I was satisfied given the circumstances.

Goal # 2 — Grow Projected Annual Dividend Income To $1600 Annually (Achieved)

My second dividend-related goal for 2023 was to grow my projected annual dividend income (PADI) to $1600.

Fortunately, this goal was exceeded as well. I closed out 2023 with my PADI at $1727.24, which was an increase of $741.40 during the year.

In retrospect, I would have easily surpassed $1600 in PADI at the end of 2022 if I had not have bought a home. So this goal is a bit bittersweet, as it feels like I should’ve already been here. I had to take a step back in order to fund a downpayment. But just over a year later, it feels like it was the right move for the long term. It’s really nice not seeing my rent increase each year. Furthermore, I’ve watched rent prices increase to more than my mortgage payment for places half the size.

Although it was a step back in the short term, I firmly believe I am in a better place to reach financial independence through dividend investing in the long term now that I have a more controllable housing situation.

Goal # 3 — Pay Zero On Commissions & Investment Expenses (Failed)

Unfortunately, I failed my goal to pay zero on commissions and investment expenses in 2023.

Hence why I decided to set a more realistic goal in 2024 to keep my commission costs below 0.08% of my portfolio’s value.

Of course, I did significantly reduce my commission costs in 2023 compared to 2022, which was a win. But I executed a few more trades than anticipated, which resulted in a few commission fees in my USD account.

Goal # 4 — Earn $160 In One Month From Dividends (Achieved)

Admittedly, earning $160 is a rather meaningless goal. It’s more of a milestone than a goal. Despite being a dividend income investor, investing activities should not be carried out with the sole purpose of earning dividend income. Total returns and choosing the best businesses at the right price matters most.

Nevertheless, I accomplished this goal in the final month of the year, as I earned $164.39 in dividends. Check out the full December 2023 dividend income update here.

Goal # 5 — Save 16% Minimum Of Net Income (Achieved)

Now we are getting to the personal finance goals. My first personal finance goal was to save at least 16% of my net income in 2023.

To provide more context on this goal, I work a job with fluctuating hours, so I purposely set my savings rate goal low to ensure I don’t overextend myself. For example, I set my 2022 savings goal at 15%, but ended up saving over 27%. By good luck and through willingness to work as many additional hours as possible, I am usually able to outperform.

In the same way, I was able to overachieve my 16% savings target in 2023 again. In total, I saved over 28% of my net income — I beat my target by over 12%. I was quite satisfied with this result, given that there were a lot of unknown variables and new expenses in 2023.

Goal # 6 — Contribute At Least 1% Of Net Income To Emergency Fund (Achieved)

Another one of my personal finance goals for 2023 was to contribute 1% per pay into my emergency fund. It turned out that I was setting the bar low again.

With new motivating factors to build up my emergency fund, including owning a house, a car, and adopting two kittens, I was able to significantly outperform my 1% per pay target.

In the end, I was able to put 3.3% of my net income towards my emergency fund. Frankly, I still think it needs to be higher, which is why I am focussing even more on building up my emergency fund in 2024.

Goal # 7 — Establish A Sinking Fund & Meet Saving Objectives (Achieved)

In addition to saving for retirement and building my emergency fund, I started a sinking fund in 2023.

For those who are unfamiliar with the concept, a sinking fund is a strategic way to save for specific purchases by saving small amounts over time.

For example, I use my sinking fund to save for random spending, gifts/Christmas, special events, vacations, clothes, and more.

Although I didn’t exactly meet all my saving objectives, I’m going to call this goal a pass because I did establish a sinking fund. Additionally, some of the categories I was saving for changed over the course of the year. For instance, my household adopted two kittens in 2023. We always intended to get pets once we bought a place. We just didn’t expect that it would happen so quickly. So although I didn’t fully fund the vacation side of my sinking fund, the good news is that I had a sinking fund there to pay for the adoption fees. After all, the purpose of a sinking is to have money available to spend.

Our Costco plant funded with our joint account

Goal # 8 — Fund A Joint Account For Housing Expenses & Vehicle Maintenance (Achieved)

In addition to saving for retirement, building an emergency fund, and establishing a sinking fund, another financial goal was to fund a joint savings account for housing expenses and vehicle maintenance.

Fortunately, we were able to meet this goal too. However, we have decided to change the way we manage this account in 2024.

At the beginning of 2023, we used this account to basically buy new stuff we wanted for the house. For example, we bought a really nice plant from Costco. Otherwise, we used this account to pay for oil changes.

But once we adopted the kittens, we began using this account to save for the cats as well.

Unfortunately, we had to take one of our kittens to the vet a few more times than expected. So the account balance is lower than we would like it to be.

As a result, we altered the way we manage this account. It has become more of a joint emergency fund for cats, vehicle maintenance, and housing emergencies rather than a spending account.

We decided to save for oil changes as a regular expense and pay for things we want for the house separately.

Ideally, we won’t touch the money in this account and it will slowly grow, unless we have to pay an emergency vet bill, housing expense, or vehicle maintenance.

Goal # 9 — Maintain Budget & Remain Financially Organized Daily (Achieved)

Out of all the financial goals on this list, I might have done the best with this one. I definitely met and exceeded this goal.

I was on top of my budget daily like it was my full-time job. I learned a lot and thoroughly enjoyed it.

For some people, living in the spreadsheets like this would be a nuisance. But I am so glad I tracked every expense because now I know exactly how much my life costs.

Furthermore, I have data to build on in 2024. I can cut back spending on the areas that don’t bring value. It’s so eye opening to find out how much you spend on small purchases over the course of a year.

Of course, maintaining a budget this thorough isn’t for everyone, but for me, it helped gamify my spending. Additionally, the personal finance side of my journey towards financial independence has become as important and fun as the dividend income investing side.