All numbers rounded, obviously.
My income changed a lot in the last year – I went from an occasionally employed student to a full time worker. Still figuring out the money.
Life Situation: I’m a 33 year old single parent to two kids, 8 & 10. We live in a city on the Canadian prairies. One of my sons has a pervasive developmental disorder and needs special care at all times.
Gross Salary/Wages: $60k per year
Pre-tax deductions: 10% of my income is matched by my employer in a pension. Union dues, taxes, etc. reduce my biweekly paycheque to $1,450
Other Ordinary Income: $8400 child support and $6k in government transfers. These transfers will be reduced next year, I don’t yet know by how much
Adjusted Gross Income: $52k
Taxes: not sure what you need to know… they take the appropriate amount, so I get a small refund each year.
Current expenses:
Housing: mortgage + taxes + insurance + utilities = $1,000 per month
Food: $500 per month
Transportation: $450 car payment + bus pass + gas + maintenance = $600 - $700 per month (I drive the kids to daycare and take a bus from there, as the bus is cheaper + faster than parking downtown.)
Entertainment: $300/ month for family gym membership, outings & events, gifts, booze, meals out. I could cut this in half if needed. I cook at home 95% of the time, pack lunches for all of us, use the library, etc.
Phone & internet: $130/ month. No cable or Netflix or anything like that.
Daycare: $1,000 per month – this is non-negotiable; I pay a lot to have my kid in a daycare that can handle his needs.
Travel: my family lives in a distant province, annual visits with them cost me $2k or so.
Home repairs/ improvement: my house is 120 years old and needs a lot of work. I put ~$10k into it each year. In maybe 5 years the major issues will be handled and this cost will be reduced quite a lot.
Mortgage info: $450/ month, $16k remaining owing, up for renewal in april 2017, at which time I will pay it off in full. 4% interest.
Assets:
house is worth $130k, but needs major repairs.
Investment account (TFSA) of $10k
HELOC for $25k that I have not tapped into (this isn’t an asset, but is my emergency fund equivalent)
Liabilities:
Car payment (2013 honda fit) is $450/ month, 2% interest, $15k remaining in the loan and the car is worth $17k. when I bought it I couldn’t qualify for a bank loan (student, no job) so couldn’t buy a used car – this one is reliable, good on gas, and will need to be replaced in the next 5 years, as my boys’ legs are already getting too long to fit in the back seat and they are destined to be very tall people.
Provincial student loan: $6k @ 0% interest. This one can take its sweet time getting paid off.
Federal student loan: $30k @8.5%. I sometimes qualify for repayment assistance so haven’t really tackled this one. If they stop giving me free money for it I’ll start hitting it hard.
Specific Question(s):
I have a lot of conflicting obligations and goals.
1. My parents are in terrible shape and no longer working, with no income. I need to be helping out. They are in their early 60’s so too young for most senior income support programs. I was thinking of buying them a small house or condo so they could sell theirs and live on the proceeds, but that isn’t a financial reality for me at this point. I need to find a way to pitch in.
2. My pension will cover about half of my retirement income needs. I’m happy to work until I’m at least 55 – I like my job, and 55 is the minimum age to retire without taking a hit to my pension.
3. I want to either travel or get a property outside the city and develop it into a place where I can live when the kids are grown and gone. Clearly I can’t do both of these, but one or the other would add a lot to my quality of life.
4. I have no idea what I’m doing with my investment account and could use some starter points. I can give more detail on what I’ve been doing if that is helpful.
Thoughts?