Author Topic: Adjusting expectation  (Read 3471 times)

danzabar

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Adjusting expectation
« on: May 13, 2019, 07:06:04 AM »
Hello everyone and thanks for any feedback you can provide.
My wife and I purchased a house in a HCOL area at the same time that her work switched from 5 days per week to 4 for better lifestyle, to get things done around house/life and quality of life in general.

I forgot to mention: i'm 36 and wife is turning 32.

Here are our budget details. We are working hard to get our grocery bill under control and considering other ways to deal with high daycare expenses.

We invest 18% of our incomes monthly at source which works out to a total of 2180.00

Current RRSP: 153K
Wife has golden hand cuffs pension which is 18% of total income per year. Estimated at 95-100,000.
TFSA : 26,000.
Savings $1000.00
House value: $700,000.
Owe: 513,000.


Total incomes: self: 81,000 with 3000 raise per year.
2180 total RRSP deducted at source for self.
Annual federal tax: 13,124.73
Annual Provincial tax: 10,979.46
Canada Pension Plan 4,090.80
EI Premium 1,355.52
 
wife: 105,000 x 0.80 = $84,000.
2180 total RRSP deducted at source for self.
Annual federal tax: 13,124.73
Annual Provincial tax: 10,979.46
Canada Pension Plan 4,090.80
EI Premium 1,355.52
 

Take home net pay monthly after pension and rrsp contributions: 7546 (unsure exactly how to determine total income before rrsp withdrawals as this reduces how much tax we pay at source).

Child care benefit from gov is - 345 which will be moving up to approx 450$ in July.
Spending
Mortgage: 2364 x 25 years. 3.49 term x 5 years.
Half of this amount goes to principal (which could be viewed as a savings of 1200 per month).
Property tax Ė 460
Utilities Ė 80 water, heat: est. 100, electric. 100
Daycare:  1740 ** OUCH
Groceries Ė 1000 **OUCH
Eating out/coffee: approximately 300$ per month.
Insurance Ė (house/car) 170$
Gas Ė 100 approx. I walk to work or run/bus but typically spend nothing on commute. Wife drives about 2.5 km each way
Bridge toll: 20$ per month.
Internet - $85
Cellphones: 80$ for both phones.
Netflix 13.99$

We had an excellent cash flow before moving into an expensive house and reducing my wife's workdays to 4 instead of 5, while the house/neighborhood is phenomenal for our two boys and quality of life, I'm not happy with the tightness of our budget. Once our youngest is in the toddler room we will free up about 200$ per month but looking for help to widen the gap in our spending.

Goals: increase savings rate, cut expenses, we also plan to do some house improvements and in several years sell house for profit.
« Last Edit: May 13, 2019, 10:01:31 AM by danzabar »

ysette9

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Re: Adjusting expectation
« Reply #1 on: May 13, 2019, 09:10:08 AM »
It is a struggle to follow what is going on in your case study. Can you please post total income, total taxes, total spending, and total saving? What are your goals?

danzabar

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Re: Adjusting expectation
« Reply #2 on: May 13, 2019, 10:02:04 AM »
thanks, I've tried to make it more clear but may need to look up additional details.

ysette9

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Adjusting expectation
« Reply #3 on: May 13, 2019, 10:52:08 AM »
Some quick observations:

Daycare is expensive but it is also temporary.  If it is a good situation, then I vote for sticking with it and cutting in other areas. Quality daycare is important.

You are spending $1300/month on food. That is a ton. Get that down.

You seem to have bought way too much house for your income. Iíd encourage you to think long and hard about that decision and figure out if it really is the most important thing in your financial life to own that particular home at this particular time. You are sacrificing a lot to stay there and keep up that mortgage payment.

Have you been tracking your spending? How about clothes and diapers and vacations and  insurance? Have you calculated your true savings rate based on previous cash flow and not an ideal budget?

If you are planning on selling the house in the future then why are you in it now?

BrightFIRE

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Re: Adjusting expectation
« Reply #4 on: May 13, 2019, 02:47:54 PM »
Total incomes:
self: 81,000 with 3000 raise per year.

wife: 105,000 x 0.80 = $84,000.
...
We had an excellent cash flow before moving into an expensive house and reducing my wife's workdays to 4 instead of 5, while the house/neighborhood is phenomenal for our two boys and quality of life, I'm not happy with the tightness of our budget. Once our youngest is in the toddler room we will free up about 200$ per month but looking for help to widen the gap in our spending.

Goals: increase savings rate, cut expenses, we also plan to do some house improvements and in several years sell house for profit.

What jumped out at me is that your wife makes more than you do, but for some reason you chose to reduce her workdays (and therefore income) instead of yours. She is also younger, so presumably has a better chance to increase that income even more over time. This makes no sense to me.

I'm not sure that your quality of life is "phenomenal" if you are already worrying about money in the new house. You only have $1000 in savings! You spend more than that on food every month! You need to learn to cook. I can't imagine anyone who knows how to cook would spend anywhere near that amount. I buy fancy cheeses and imported salami and dark-chocolate covered fruit and have never come near that amount, even adjusting for 2 kids that I don't have.

MrsPB

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Re: Adjusting expectation
« Reply #5 on: May 13, 2019, 04:57:01 PM »
Iím going to guess you might be in HRM, Nova Scotia purely by the mention of bridge tolls and the fact that a $700k home is considered expensive (which it is but in Vancouver it would be a steal!!).

Iím here too and we have two kids, one primary and one preschooler. I will say that even though the daycare fees drop slightly as they get older, itís eaten up with increased groceries, clothing/footwear, the Ďbirthday party circuití, and increased activities such as swimming lessons or rec activities. I know these are optional but I have seen those daycare savings absorbed in other ways.

Echo what another poster said, there are a whole bunch of expenses missing like clothing, haircuts, life insurance premiums, vacation, gifts/Christmas, fun activity costs,  home supplies (may be in with groceries?), misc such as tax prep fees, mailing costs, Ďditch taxí!!, and so on.

In your defence, I will say that from one Canadian to another, $1000 for groceries isnít unreasonable based on the costs here in Nova Scotia and lack of Aldi/Lidl and such. If that spend also includes toiletries and consumable household supplies, then Iíd say itís fairly reasonable for a family of 4 with 2 working parents of young children. Are the kids getting snacks and lunch included at daycare? If so, then I think you could work to drop that spend a bit. Bear in mind it goes up when they start school and you are then providing those meals/snacks. Coffee/eating out is quite high though.

I am impressed with your gas costs though, itís so expensive right now!! We spend many times more than that. Also, how do you get two cell plans for $80?
« Last Edit: May 13, 2019, 05:00:33 PM by MrsPB »

danzabar

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Re: Adjusting expectation
« Reply #6 on: May 13, 2019, 05:37:37 PM »
Thanks! We are frugal in some areas and have a lot of room for improvement in others. Iím open to any ideas on food budget but Iíve started by stopping all coffee and snacks out except for special occasions. We rarely use our paid for Honda Fit so it takes almost no gas. We live in the biggest city in HRM :) - for the cellphone I recommend zoomer wireless to everyone. Itís a 36 cad plan that usually has 2-4 gigs a month and almost unlimited minutes: if you pm me for a referral we both save 50$ on our bills. I love them and they use Rogers carrier and recently doubled
My data for being a loyal client.

habaneroNorway

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Re: Adjusting expectation
« Reply #7 on: May 15, 2019, 07:45:55 AM »
Driving 2.5km to get to work? Thats 25 minutes walking distance and 6-7 minutes on a bike.  With 1000 bucks in savings you cannot spend 300 dollars a month on eating out and coffee. The food bill also looks like it could be trimmed down a bit and daycare is off the charts. It will eventually go away, but new expenses will occur with kids.

You also dont have any item for home maintance. Its not like there is sth every month, but stuff do pop up now and then and can be a fair amount of money, especially if the house is old.

Dogastrophe

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Re: Adjusting expectation
« Reply #8 on: May 15, 2019, 08:21:21 AM »
Driving 2.5km to get to work? Thats 25 minutes walking distance and 6-7 minutes on a bike. 

Halifax has two bridges - one is auto only, one has a walking and bicycle lane.  Depending on which bridge they use, walking / bicycling may not be a viable option without adding a lot of time to the commute.

MrsPB

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Re: Adjusting expectation
« Reply #9 on: May 15, 2019, 06:09:02 PM »
Thanks! We are frugal in some areas and have a lot of room for improvement in others. Iím open to any ideas on food budget but Iíve started by stopping all coffee and snacks out except for special occasions. We rarely use our paid for Honda Fit so it takes almost no gas. We live in the biggest city in HRM :) - for the cellphone I recommend zoomer wireless to everyone. Itís a 36 cad plan that usually has 2-4 gigs a month and almost unlimited minutes: if you pm me for a referral we both save 50$ on our bills. I love them and they use Rogers carrier and recently doubled
My data for being a loyal client.

Where are you doing most of your grocery shopping? We do a combo of Costco and Superstore. Do you have the PC WE Mastercard? If you shop at superstore/shoppers, itís a great points accumulator.

habaneroNorway

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Re: Adjusting expectation
« Reply #10 on: May 16, 2019, 12:23:14 AM »
Halifax has two bridges - one is auto only, one has a walking and bicycle lane.  Depending on which bridge they use, walking / bicycling may not be a viable option without adding a lot of time to the commute.

According to Google maps from the start of the auto-only-bridge to the other side of the auto-only-bridge is about 7km. Add the original 2.5km and you are looking at 10km give or take some. My most regular biking route to work is about 30 minutes going in and 33-34 minutes going home. Its 13km and going home involves a net climb of over 100 vertical meters.

Unless I'm seriously off on the whereabouts or something else this is still easily doable by bike, but prob requires shower facilities at work. It will of course add some time to the commute and might interfere with daycare routine.

But the distance itself should not be a showstopper. What can be biked or not depends a lot on who you ask, how used they are to biking and how fit they are. All these factors can be worked on quite easily.

(disclaimer: Never been anywhere remotely close to Halifax)

Dogastrophe

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Re: Adjusting expectation
« Reply #11 on: May 16, 2019, 04:56:48 AM »
(disclaimer: Never been anywhere remotely close to Halifax)

Yet you are arguing with people who live in Halifax. 

danzabar

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Re: Adjusting expectation
« Reply #12 on: May 16, 2019, 05:59:09 AM »
Thanks! We are frugal in some areas and have a lot of room for improvement in others. Iím open to any ideas on food budget but Iíve started by stopping all coffee and snacks out except for special occasions. We rarely use our paid for Honda Fit so it takes almost no gas. We live in the biggest city in HRM :) - for the cellphone I recommend zoomer wireless to everyone. Itís a 36 cad plan that usually has 2-4 gigs a month and almost unlimited minutes: if you pm me for a referral we both save 50$ on our bills. I love them and they use Rogers carrier and recently doubled
My data for being a loyal client.

Where are you doing most of your grocery shopping? We do a combo of Costco and Superstore. Do you have the PC WE Mastercard? If you shop at superstore/shoppers, itís a great points accumulator.


We have been shopping mostly at Sobeys. I find their prices outrageous but when I've tried superstore I didn't find much of an improvement. I think we should get a costco membership and try to get some savings in bulk items. Also, a lot of our grocery costs include diapers so that should drop off as my youngest moves towards potty training. I will look into that card for sure.

danzabar

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Re: Adjusting expectation
« Reply #13 on: May 16, 2019, 06:00:04 AM »
(disclaimer: Never been anywhere remotely close to Halifax)

Yet you are arguing with people who live in Halifax.

Yeah, my wife could actually bike on the bridge she takes to work, however, with two kid drop-off we don't currently have a ride that can change that and since we spend less than 100$ a month on gas - it is not a huge priority.

danzabar

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Re: Adjusting expectation
« Reply #14 on: May 16, 2019, 06:01:56 AM »
Total incomes:
self: 81,000 with 3000 raise per year.

wife: 105,000 x 0.80 = $84,000.
...
We had an excellent cash flow before moving into an expensive house and reducing my wife's workdays to 4 instead of 5, while the house/neighborhood is phenomenal for our two boys and quality of life, I'm not happy with the tightness of our budget. Once our youngest is in the toddler room we will free up about 200$ per month but looking for help to widen the gap in our spending.

Goals: increase savings rate, cut expenses, we also plan to do some house improvements and in several years sell house for profit.

What jumped out at me is that your wife makes more than you do, but for some reason you chose to reduce her workdays (and therefore income) instead of yours. She is also younger, so presumably has a better chance to increase that income even more over time. This makes no sense to me.

I'm not sure that your quality of life is "phenomenal" if you are already worrying about money in the new house. You only have $1000 in savings! You spend more than that on food every month! You need to learn to cook. I can't imagine anyone who knows how to cook would spend anywhere near that amount. I buy fancy cheeses and imported salami and dark-chocolate covered fruit and have never come near that amount, even adjusting for 2 kids that I don't have.

My wife going down to 4 days was not necessarily the easiest financial decision but has allowed us to keep up with errands, covering sick days (no local family to help us) and keep house from being a giant mess.

I appreciate your feedback. I should mention that we keep our savings account low and have most cash sitting in TFSA but you're right it should be higher. We do cook but not always and I'm going to chop our restaurant-take-out lunches way down.

habaneroNorway

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Re: Adjusting expectation
« Reply #15 on: May 16, 2019, 06:04:03 AM »
Yet you are arguing with people who live in Halifax.

If ~7.5km extra is a "substantial" distance to bike is rather independent on where that is - unless there is a very big elevation gain/loss (my own, as said is over 100 vertical meters net (accumulated about 170). For someone not used to biking ~10km or ~7-8km extra or whatever can seem like a lot, for someone who bikes regularly its just a short hop easily doable twice a day. Unless there are some weird local circumstances and/or the actual difference is much bigger than suggested by Google Maps I'd file that under "viable options".  But your milage might vary. I obv know nothing of potential bike routes, traffic situation etc.


Dogastrophe

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Re: Adjusting expectation
« Reply #16 on: May 16, 2019, 07:20:23 AM »
Yet you are arguing with people who live in Halifax.

If ~7.5km extra is a "substantial" distance to bike is rather independent on where that is - unless there is a very big elevation gain/loss (my own, as said is over 100 vertical meters net (accumulated about 170). For someone not used to biking ~10km or ~7-8km extra or whatever can seem like a lot, for someone who bikes regularly its just a short hop easily doable twice a day. Unless there are some weird local circumstances and/or the actual difference is much bigger than suggested by Google Maps I'd file that under "viable options".  But your milage might vary. I obv know nothing of potential bike routes, traffic situation etc.

The bike route across that bridge is not as simple as google shows it to be.  It requires a dismount and crossing of a very busy slip road to get to the entry of the bridge path (for me, there is no direct bridge access - I need to go down the busy slip road, cross road, do a 180, then climb the bike path); on other side same thing to get back on track.  If they are travelling to main business district, they need to navigate a couple of very busy roads.  Added to all this are some of the worst drivers you're likely to encounter who all seem hell bent on running bicyclist off the road.

My commute is just over 10km from house to office.  In mornings, it takes me less than 15 minutes by car; approx 25 min for return trip.  I've done it by bicycle at a pace where I'm not a sweaty mess going to work - 53 min (elevation gain / loss around 75m).  Transit takes me an hour + 15 min walk.

Dogastrophe

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Re: Adjusting expectation
« Reply #17 on: May 16, 2019, 07:28:34 AM »
We have been shopping mostly at Sobeys. I find their prices outrageous but when I've tried superstore I didn't find much of an improvement. I think we should get a costco membership and try to get some savings in bulk items. Also, a lot of our grocery costs include diapers so that should drop off as my youngest moves towards potty training. I will look into that card for sure.

We do most of our groceries at Sobeys but only because it is directly across the street.  Last couple of trips, we've gone to WalMart (early morning!) - a few products are a lot cheaper.  Kraft PB - 7.99 at Sobeys, 3.99 at WalMart!  However, many are the same price.  We had a Costco membership for a few years - great prices for chicken, ground beef, and toilet paper.   

MrsPB

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Re: Adjusting expectation
« Reply #18 on: May 16, 2019, 01:59:37 PM »
Thanks! We are frugal in some areas and have a lot of room for improvement in others. Iím open to any ideas on food budget but Iíve started by stopping all coffee and snacks out except for special occasions. We rarely use our paid for Honda Fit so it takes almost no gas. We live in the biggest city in HRM :) - for the cellphone I recommend zoomer wireless to everyone. Itís a 36 cad plan that usually has 2-4 gigs a month and almost unlimited minutes: if you pm me for a referral we both save 50$ on our bills. I love them and they use Rogers carrier and recently doubled
My data for being a loyal client.

Where are you doing most of your grocery shopping? We do a combo of Costco and Superstore. Do you have the PC WE Mastercard? If you shop at superstore/shoppers, itís a great points accumulator.


We have been shopping mostly at Sobeys. I find their prices outrageous but when I've tried superstore I didn't find much of an improvement. I think we should get a costco membership and try to get some savings in bulk items. Also, a lot of our grocery costs include diapers so that should drop off as my youngest moves towards potty training. I will look into that card for sure.


I avoid Sobeyís as much as possible, itís so expensive although some of the BOGO deals are good. Now that we have kids, we find Costco good, we can get through the larger volumes of fresh produce and have a second freezer for the bulky frozen items. Diapers are often the best price there. They are not *always cheaper* in everything and they donít have everything we need but Iíd say 2/3 of our groceries and household items are bought there. It is time consuming to go though and to unload and re package things for the freezer like portioning out chicken or ground beef.

I have the PC world elite mastercard and I get 3x the points in store, are so and shoppers drug mart, plus they send you customized points deals weekly based on what you actually buy. I also have the annual PC insiders membership which gets you 20% back in points on baby items, pc organic products and joe fresh. I accumulate probably $50 points a month which I can use to pay for anything in store. You also get free pick up for click and collect. Itís convenient and you save money by ordering online and not impulse buying.
« Last Edit: May 16, 2019, 02:03:03 PM by MrsPB »

MrsPB

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Re: Adjusting expectation
« Reply #19 on: May 16, 2019, 02:51:43 PM »
I also confirm that Halifax is not cycle friendly and drivers are not used to cyclists either so itís risky. The roads here are jammed with potholes so thatís a hazard as rider and also cars often swerving to avoid them. I have biked in other cities like Vancouver, I would not bike in Halifax at present if it is on roads shared with vehicles. Just not worth it and honestly there arenít a lot of decent weather months in the year either.

habaneroNorway

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Re: Adjusting expectation
« Reply #20 on: May 17, 2019, 12:58:56 AM »
In your numbers in the first post there are a couple of not obvious, but important omissions:

- The actual cost of owning a car. Maintanance/service and depreciation. You don't say what kind of car it is, but it looses value over time and if a rather new car this number is sustantial. It will need service and/or repairs, new tires etc

- The actual cost of owning a (big) house. Every now and then something will pop up. Not every month, not even every year but eventually stuff will need to be maintained or replaced.

You should have around 1000 dollars / month left given the numbers from the first post. That's not a lot for everything you don't list as expenses - clothing, entertainment, gifts, holidays. Over time, you are likely to find it hard to save much because there will always be "something" that pops up. It's easy to think it's a one-off but in my experience these "one-offs" can come in many forms.

Based on your take-home pay you are overconsuming housing and day care. The cost of day-care is mind-boggling to me as I'm used to spending less than half on it. If there are cheaper options available in your area I would really look into it - even if it involves a longer commute or other chores. Its a lot of money to burn every month for several years.  In your financials there isn't room for spending 300 dollars / month on eating out and coffee. Its 4% of your take-home pay. Groceries must be cut. If you don't have it - develop cooking and shopping skills. Learn what items cost and buy when they are cheap. This is worth a lot, is totally risk-free and will benefit you and your family every month for the rest of your lives. Almost every grocery budget has room for some trimming.

FreeBear

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Re: Adjusting expectation
« Reply #21 on: May 17, 2019, 10:07:33 PM »
The good news is that you have a gross (before tax) savings rate of around 15%.  I suspect this would easily give you a decent retirement in your 60's, even 50's, once the mortgage is paid off.  It's fortunate that you (really your wife) is forced to save by her work pension, otherwise, maybe you'd have an even bigger mortgage and fewer retirement savings.

What about university funding for your children?   Here in the United States, it's very expensive.

You mentioned that you had strong cash flow before moving.  Was life that terrible before?   You seem almost surprised by the level of financial stress after the moving to the nicer house.  Fancy house or peace of mind.  Now your whole life is dictated by where you live. 

remizidae

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Re: Adjusting expectation
« Reply #22 on: May 17, 2019, 10:17:33 PM »

What jumped out at me is that your wife makes more than you do, but for some reason you chose to reduce her workdays (and therefore income) instead of yours. She is also younger, so presumably has a better chance to increase that income even more over time. This makes no sense to me.

I'm not sure that your quality of life is "phenomenal" if you are already worrying about money in the new house. You only have $1000 in savings! You spend more than that on food every month! You need to learn to cook. I can't imagine anyone who knows how to cook would spend anywhere near that amount. I buy fancy cheeses and imported salami and dark-chocolate covered fruit and have never come near that amount, even adjusting for 2 kids that I don't have.

My wife going down to 4 days was not necessarily the easiest financial decision but has allowed us to keep up with errands, covering sick days (no local family to help us) and keep house from being a giant mess.
[/quote]

You havenít really explained why youíve chosen to have the higher-earning person work less, while complaining thereís not enough room in your budget. You could do errands, sick days and cleaning too, no?

I think you and your wife need to do some thinking about how much unconscious and internalized sexism has played into this decision. Is there something in the back of your (or her) mind that tells you that a man isnít the right person to do childcare and cleaning? Or that the manís career is always more important? Because people come up with a lot of rationalizations, but it always seems to be the wonanís career that takes a hit, even when it would clearly be more financially beneficial for the man to cut back on hours. Your decision to maintain gender roles is costing you ~$5 000 a year (difference between giving up 20% of her salary vs giving up 20% of yours.)

danzabar

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Re: Adjusting expectation
« Reply #23 on: May 18, 2019, 05:01:26 PM »
Thanks for your feedback. My wife going down to four days was something  that she really wanted to do and something her employer allows. Mine does not permit it but I have more holidays a year so that is one small benefit. I feel that the addition of a second child in daycare timed with a surprise approval of her being able to work 80% has been the financial shock. I definitely clean, cook and take care of our kids as much as I can and would reduce my hours instead if given the opportunity but I totally see how what I initially wrote sounded
In terms of education we donít necessarily believe in paying for our kids degrees as we both have graduate degrees earned by scholarships and I work at a university which provides 50% off tuition

MrsPB

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Re: Adjusting expectation
« Reply #24 on: May 19, 2019, 06:01:30 AM »


Based on your take-home pay you are overconsuming housing and day care. The cost of day-care is mind-boggling to me as I'm used to spending less than half on it. If there are cheaper options available in your area I would really look into it - even if it involves a longer commute or other chores. Its a lot of money to burn every month for several years.

That is what daycare costs for two kids here, itís actually cheaper than a lot of Canada (except Quebec where they get subsidized care for $7/day!!).. We paid about the same as OP when both were in full time daycare, itís the going rate and there isnít much variation from that. We do get child benefit in Canada each month which is a sliding scale based on net income so that can help plus we can claim up to $8k per child in income tax credits so taking those two factors into account, it does reduce the cost but you still have to pay it out up front each month. I have a school-aged child and pay $400 a month for her before and after school  care. During March break and the 9 weeks of summer break, Iíll be paying $200/week for full time care. Daycare for my 3 yr old is $805 a month and thatís an average rate but does include meals and snacks each day.

I donít think thereís much OP can do about this cost.

habaneroNorway

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Re: Adjusting expectation
« Reply #25 on: May 19, 2019, 06:44:19 AM »
Ok not much to do about that probably. So housing is the real problem then. Adding mortgage + utilities + property tax over 40% of take-home pay goes to housing (some towards debt reduction). And that is before adding maintenance, furniture bought for a lot of rooms and the planned renovation.  Even if doing most of the labour (not very realistic with 2 jobs and 2 kids) the last is gonna cost serious money.

What is the actual end-of-month balance on average? As mentioned - there are lots of running expenses not accounted for in the first post.
« Last Edit: May 19, 2019, 06:49:35 AM by habaneroNorway »

danzabar

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Re: Adjusting expectation
« Reply #26 on: May 19, 2019, 07:48:08 AM »
I agree with you.
Iím gojng to work hard on our grocery budget and limit eating out to very rare times. It may be that full time work for both of us is the best option until we reevaluate our housing in 4 years. Our house has the option to accommodate in-laws which is a good plus for this time of our life. Iíll run my numbers again

habaneroNorway

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Re: Adjusting expectation
« Reply #27 on: May 19, 2019, 08:17:04 AM »
I would also suggest that you and your wife for an extended period - say a few months - in the greatest detail track every single dollar you spend. From the first post you should have a handsome amount after each month, which I bet you don't have, so there is obviously quite a lot missing from expenses. You need to find out what, how much and what to cut back on. Groceries is also a broad category. Any guilty pleasures? Alcohol? Snacks? Do you throw away uneaten food? Read up on cheap meals. Cheap does not mean boring or tasteless. Bring lunch to work.

Tracking detailed expenses gives a good overview, but also makes you think more before you spend. Do I need this? Is this the right price for this? Can I buy this on Craiglist? Borrow it?

Just a point in case: You list your commute (run/walk) as free. While it is as cheap as it gets, its still not free. I do the same myself and I wear out a couple of high-end running shoes every year. I need clothes - they do last a good while, but not forever. Socks get worn out quickly due to 15-20.000 steps per day. Cheap? Yes. Free? No.

FLOW

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Re: Adjusting expectation
« Reply #28 on: May 19, 2019, 08:23:04 AM »
My partner and I make more than you, and our home is less than half the cost of yours.  Hope you're enjoying your spare bedrooms, because they are adding years of working to your financial journey.

Look, this is easy.  3 biggest costs for most people:

1. Housing
2. Food
3. Transportation

If you really want to lower your cost, you should consider reevaluating your housing decision.  Good luck.

habaneroNorway

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Re: Adjusting expectation
« Reply #29 on: May 19, 2019, 11:21:08 AM »
It may be that full time work for both of us is the best option until we reevaluate our housing in 4 years. Our house has the option to accommodate in-laws which is a good plus for this time of our life. Iíll run my numbers again

Going back to full-time for both is the most obvious quick-fix. The unholy trinity of lower pay, bigger house and a 2nd child is not a good combo. Regardless of what you choose to do with the housing situation, that won't be solved very quickly anyway and you need a quick fix. More pay and/or less expenses should be implementable quickly and is probably the best option now. How is your house - is it possible to rent out some of it? Maybe even if it requires some outlay like putting in a simple kitchen. If you decide to stay put for at least 4 years you need more cash coming in.

You have pretty good salaries but an obvious cashflow problem. With close to 65% of take-home-pay in fixed and "fixed" expenses you might need to get a bit creative.

On another note - while your pension savings are off to a good start due to the setup your liquid savings are dangerously low (caveat: I don't know what a TFSA is and google didn't make me much wiser). If your liquid savings are only 1000 bucks your are constantly standing on the brink of a credit event. What do you do in the case of an unexpected large expense - say car dies, roof leaks or whatever? There is non-negliable probability that you might have to increase your debt to take care of some emergency. That is not a spot you want to be in, and owning a big house (which from the renovation plans I assume is not brand new) increases the chance of bad shit costing substantial money happening.
« Last Edit: May 19, 2019, 11:34:52 AM by habaneroNorway »

mistymoney

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Re: Adjusting expectation
« Reply #30 on: June 03, 2019, 06:06:59 AM »
It may be that full time work for both of us is the best option until we reevaluate our housing in 4 years. Our house has the option to accommodate in-laws which is a good plus for this time of our life. Iíll run my numbers again

Going back to full-time for both is the most obvious quick-fix. The unholy trinity of lower pay, bigger house and a 2nd child is not a good combo. Regardless of what you choose to do with the housing situation, that won't be solved very quickly anyway and you need a quick fix. More pay and/or less expenses should be implementable quickly and is probably the best option now. How is your house - is it possible to rent out some of it? Maybe even if it requires some outlay like putting in a simple kitchen. If you decide to stay put for at least 4 years you need more cash coming in.

You have pretty good salaries but an obvious cashflow problem. With close to 65% of take-home-pay in fixed and "fixed" expenses you might need to get a bit creative.

On another note - while your pension savings are off to a good start due to the setup your liquid savings are dangerously low (caveat: I don't know what a TFSA is and google didn't make me much wiser). If your liquid savings are only 1000 bucks your are constantly standing on the brink of a credit event. What do you do in the case of an unexpected large expense - say car dies, roof leaks or whatever? There is non-negliable probability that you might have to increase your debt to take care of some emergency. That is not a spot you want to be in, and owning a big house (which from the renovation plans I assume is not brand new) increases the chance of bad shit costing substantial money happening.

Your google skills are a bit rusty.....

Quote
Tax-Free Savings Account (TFSA) - Investopedia
https://www.investopedia.com/terms/t/tax-free-savings-account-tfsa.asp
Apr 4, 2019 - The Tax-Free Savings Account (TFSA) is an account that does not apply taxes on any contributions, interest earned, dividends, or capital gains, and can be withdrawn tax free. This savings account is available to individuals aged 18 and older in Canada and can be used for any purpose.