Author Topic: 15k a month-can't get it together  (Read 5691 times)

Deano

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15k a month-can't get it together
« on: November 04, 2014, 07:51:08 PM »
Revolting case study in the Globe and Mail. 15K a month and they can only save 500 a month towards their wedding. Not sure where to begin-the advice they get is terrible, they have no clue.

http://www.theglobeandmail.com/globe-investor/personal-finance/household-finances/soon-to-be-married-couple-needs-to-make-paying-off-debt-a-priority/article21412759/

Fodder

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Re: 15k a month-can't get it together
« Reply #1 on: November 04, 2014, 09:14:58 PM »
OMG they owe four times their HUGE income.

I was surprised to see they actually had a decent amount in RRSPs for a couple their age.....but their spending habits are insane.  INSANE.

hernandz

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Re: 15k a month-can't get it together
« Reply #2 on: November 04, 2014, 10:51:24 PM »
From the article:
monthly net income:$15,210
monthly expenses: $11,773

By this accounting, they still have $4k a month to do with as they please.

I don't understand the $77 for homebuyers loan repayment which is listed separately from mortgage. Is that a 2nd mort. or some some kind of interest only mort. on the rental property. 

hodedofome

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Re: 15k a month-can't get it together
« Reply #3 on: November 05, 2014, 07:56:05 AM »
Housing is crazy in Canada, doesn't surprise me.

They should can the rental property and I bet they could get all the debt paid off and wedding saved up for pretty quick.

HairyUpperLip

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Re: 15k a month-can't get it together
« Reply #4 on: November 05, 2014, 08:44:37 AM »
Wow, that's disgusting. They earn on a very high level. No logic to this bullshit man.


Fodder

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Re: 15k a month-can't get it together
« Reply #5 on: November 05, 2014, 09:03:03 AM »
From the article:
monthly net income:$15,210
monthly expenses: $11,773

By this accounting, they still have $4k a month to do with as they please.

I don't understand the $77 for homebuyers loan repayment which is listed separately from mortgage. Is that a 2nd mort. or some some kind of interest only mort. on the rental property.

In Canada, a first-time homebuyer can cash in some of their retirement savings (RRSP) and use it for a downpayment on a first home with no penalty (we don't pay tax on money that is put in an RRSP, so normally if you took it out, it woudl count as taxable income).  You have something like 15 years to repay it.  Clearly the repayment is not a priority for this couple.

GuitarStv

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Re: 15k a month-can't get it together
« Reply #6 on: November 05, 2014, 09:41:11 AM »
Housing is crazy in Canada, doesn't surprise me.

They should can the rental property and I bet they could get all the debt paid off and wedding saved up for pretty quick.

Housing is pretty reasonable in Canada, it's only really in the largest cities that prices are expensive . . . and when compared to other large cities around the world it's not really out of control.  There is no need to spend 750k on a house in Toronto, I sure didn't.

LeboLebo

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Re: 15k a month-can't get it together
« Reply #7 on: November 06, 2014, 01:47:37 AM »
Financial Facelift?

More like Financial Facepunch! Amirite!?

MrsPete

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Re: 15k a month-can't get it together
« Reply #8 on: November 06, 2014, 06:08:08 AM »
OMG they owe four times their HUGE income.

I was surprised to see they actually had a decent amount in RRSPs for a couple their age.....but their spending habits are insane.  INSANE.
They owe over a million dollars!  And almost 700,000 of it is in their home, a home which they see as too small -- they want to move up! 

Their situation is so totally fixable, yet I doubt they'll do it. 

rocksinmyhead

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Re: 15k a month-can't get it together
« Reply #9 on: November 06, 2014, 07:00:41 AM »
OMG I so could not marry someone with $27k of consumer debt who wants a "lavish wedding." What the fuck?

MrsPete

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Re: 15k a month-can't get it together
« Reply #10 on: November 06, 2014, 10:24:06 AM »
OMG I so could not marry someone with $27k of consumer debt who wants a "lavish wedding." What the fuck?
Ah, but these two are "two of a kind", so they're not going to take that viewpoint. 

dycker1978

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Re: 15k a month-can't get it together
« Reply #11 on: November 06, 2014, 10:29:46 AM »
From the article:
monthly net income:$15,210
monthly expenses: $11,773

By this accounting, they still have $4k a month to do with as they please.

I don't understand the $77 for homebuyers loan repayment which is listed separately from mortgage. Is that a 2nd mort. or some some kind of interest only mort. on the rental property.

In Canada, a first-time homebuyer can cash in some of their retirement savings (RRSP) and use it for a downpayment on a first home with no penalty (we don't pay tax on money that is put in an RRSP, so normally if you took it out, it woudl count as taxable income).  You have something like 15 years to repay it.  Clearly the repayment is not a priority for this couple.

We did this. You get 15 years to pay yourself back, but if you buy other RRSP' over and above the 1/15 total you can claim them on your income tax and get the tax deduction.  There is no benifit to pay the RRSP money back sooner.  You do not pay interest, the only risk is the taxes that you would have to pay on the 1/15 amount if you did not pay it back in a given year.  So this is not priority for us to pay back, just make the minimums for the 15 years and any acces I will take the tax break on.