It was time for annual family meeting to discuss the budget for the upcoming year. Click on the chart above to enlarge. Every year since we've been married, my lovely wife and I discuss our annual goals and limits on our spending for a few hours on New Years Day. This is the result of this year's meeting.
Some notable changes for this year is the aggressive mortgage paydown strategy. We currently have a fixed rate mortgage for the next 4.5 years with fairly liberal repayment terms and our goal is to have the mortgage paid down to a level that could see us having it paid completely off through the following five year term. In fact, if my pay rises and no unforeseen events occur, we could easily pay of the mortgage over a total of 6 years thus allowing us the freedom to use the cash flow for other purposes. This is extremely ambitious and probably unrealistic but it is something we have set our sights on.
We are attempting to strike a balance between an ambitious RRSP contribution strategy and our aggressive mortgage paydown plan. We also have allowed for some large one time purchases like a new television and some new furniture.
Regarding our balance sheet, we expect that the value of our investments will not rise this year and we have planned that the value of our home will fall by 10% or more this year. We bought it at 20% off peak pricing and I expect it will fall another 10% or more during 2010. We have an extremely long time horizon (20+ years) for our investments so I am not concerned about the short term value of my retirement savings.
We have also increased our allotment to 'life and health insurance' and 'food and consumables' to account for our increased needs this year with an additional child coming.