Hi! I'm along time listener, first time caller and I've done my reading but I need some help sorting out a broad savings strategy for my particular situation. I'll lay out the short-ish story then add extra info for the curious. Thank you in advance!
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TLDR: We are a Mustachian Family in the middle of producing and rearing young children with a stay at home parent, debt-free (except mortgage) but looking to optimize savings when we get them. How do we prioritize which savings vehicles when our income split is 95/5 between me and my husband? Do we fund his RRSP knowing we'll be savings credits for later? He may not get a conventional job when our youngest is in school is his at-home business is working well. I don't have much room in my RRSP. Where do we dump money when we get it? We do Couch Potato mostly with TD e-series or Tangerine for TFSA and RRSPs.
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We are a family living in Whitehorse, Yukon with 2 kids (4 and 2) and a third coming at the end of October (yay!). We have a mortgage which we pay $1100/month. We have a 2007 Ford freestar van in great shape which we own outright after recently selling our 2010 Versa (we got extra savings from the sale in addition to a [face punch] $1800 tent trailer to facilitate longer camping season]. No credit card or LOC or any other kind of debt.
My salary is about $89,000 gross and my husband is a stay at home dad, which is our number 1 priority. Our number 2 priority is reducing my mandatory work years as much as possible, which is where I need your help.
Pre-first-baby we saved hard and got 20% down on the house we bought (before discovering MMM, so the house itself is probably a bit oversized) but since then we got the house, my husband quit his job in child care and we have settled into this lifestyle until my current fetus goes to kindergarten in about 6 years time. We remain a 1 van family as I bike or walk to work until I deliver the babies, then take my 1 year mat leave. My work tops up my income over EI to 93% of total for 7.5 months, and I prepare a savings account in advance to top myself up EI in the last 4 months, and we have remained debt free through the last two mat leaves, and will for the upcoming one as well.
So we aren't saving at an accelerated rate right now, but we do accumulate savings to deposit randomly and often enough. My husband makes custom keepsake teddy bears and is a musician which brings in money, we live frugally and I receive an annual bonus at work ($2200), plus all kinds of things like savings from my salary, stuff we've sold from around the house, whatever. It adds up and I have over $5500 in savings to allocate right now burning a hole and hopefully more to come as we frugal it up on mat leave! So we can't destroy contribution room just now but we can set and make goals and then ramp up when the kids go to school and we modify our strategy.
What we have now: My RRSP which is maxed out each year mostly thanks to company (Yukon Government) pension matching. My own contributions live in a TD e-series on the couch potato plan. My husband has an RRSP with PC Financial which is a cesspool of doom and needs to be moved to Tangerine or TD. We both have TFSA, mine a TD e-series and his will be at Tangerine. The kids RESPs are TD e-series couch potato.
So we are not looking for advice on how to save money/be frugal, since we're comfortable with that right now but need assistance navigating what to do with the money we collect...my RRSP contribution room is usually almost nil each year, so would a spousal RRSP even help us? Should we try to fund the husband's RRSP, he has tonnes or room and both our TFSA's have lots of room. So, I'd like a to-do list, assuming our RRSPs/TFSAs are sensible, how do we optimize until my husband is making a more substantial salary in 5-6 year's time? We both love a challenge and killing off contribution room in a methodical way would be super motivating!
Do you need any other information? We won't be able to max out contributions quickly, but still faster than most, especially when we know what's best (I don't understand taxes very well).
Thank you! Any questions are welcome!
Spellymelly
ETA: Thanks for the questions Pharma! Our TFSAs are pathetic and have tens of thousands in room each (25+ for sure each). My husband's RRSP has approx. $15,000 in contribution room, but all his credits accumulate as his salary is essentially 0. I contribute about $1500 each year to my RRSP but that maxes it out. RESPs are fully funded for each kid each year. We also used the first time home buyers from our RRSPs so we pay that back each year as well. As for annual savings possible each year, we seem to have a kid every two years although this is the last one so it's spotty, maybe 5,000 min? This year will be more due to good luck and good choices. And yes, lucky to have a wonderful top up!