I want a mustache. A big, fluffy one. I might be a Mrs. but man, I'm trying.
The Mr. and I had twin boys last year. Woops! We cloth diaper them and keep them clothed an amused with handed-down gear but now that I'm back at work, their daycare costs around $1400 per month (coincidentally, approximately half my take-home pay). Here in Canada though, childcare is tax-deductable, so the true cost is more like $1100 per month. That's on the low end of normal for this area.
Real estate in our city is insane. The four of us live in a 930 square foot 2-bedroom "starter home", bought at the height of the market in 2008 for $442,000 (woops again!) but luckily we live in an area that was relatively untouched by the crash, and today the house is valued at $513,000. I know that because we just mortgaged it to 80% of it's value (that's $410,800). Completely antimustachian right?! And yet I feel like in a way we couldn't afford not to - the cash is going towards building a rental suite in the basement that we expect to bring in $1200 per month upon completion (targeted for this September). Now we've offset those daycare costs for the trade-off of a mortgage payment that has increased by $400 per month. Once that rent is flowing in, and particularly once the boys hit school and childcare costs drop, I plan to attack that mother of a mortgage with all my might.
The Mr. and I both make decent cash. I work for the man (our provincial government) in a relatively cushy job for $56K. The Mr. is a plumber but the work comes in waves, so he pulls in at least as much as me in a bad year, or about $75K in a good year. His handiness, and buddies in the various trades, keep our home maintenance and renovation costs to a lot less than the average Joe would pay.
So this is all preface to the numbers - and my question. It looks like we've got it pretty good. We don't spend a lot on "stuff". In fact, I'm just waiting for one of my co-workers to say something about the fact that I wear the same shoes EVERY DAY. We're not into consumption. And yet, I still feel sometimes like the walls are closing in. It drove us to take out a huge mortgage because we couln't see another way. I feel like I'm trying really hard, and yet not getting ahead. Our costs are so high. So here's the breakdown:
Monthly take-home Income (his, mine and a sweet tax-break for the kids): about $7500
Expenses:
Mortgage and property tax: $2150
Daycare: $1100
RRSP contributions: $867
Tax bill (this is a one-off and related to my maternity leave): $455 (until February 2013)
Utilities: $186
Insurance for the house, 2 vehicles and our lives: $267
Cellphones: $90
Cable/Internet/Phone: $100 (believe me, I've tried to talk the Mr. out of cable. Almost at the cost of my marriage. He compromised by losing some channels but it appears that cable-free isn't going to happen)
Groceries: $600+ (I work at this. Tricking the Mr. into eating vegetarian at least once a week, buying only on sale, meal planning. But we live in Canada where groceries cost a lot more than the average american is used to)
Gasoline (2 vehicles): $300
Car payment (1 vehicle): $340
parking at my job: $100
Kids' Education fund (RESP): $100 (I want to increase this, the gov matches 20% up to a maximum of $500 per year)
Total: $6655
Miscellaneous eats up the rest - most of this is related to our health-care costs. The Mr. sees a chiropractor and physiotherapist regularly because of an injury, and this costs a lot up front, but we get a large portion back on our extended health plans through work. Aside from that, we have some home maintainance costs, and some eating out (I KNOW), the odd kiddie-related item (not toys and shit, but butt paste and the like) or personal care item.
Assets:
House: $513k
2 Vehicles - his a 2001 Ford Explorer Sporttrac (used to shuttle around plumbing tools and gear) that is paid for, mine a 2005 Dodge minivan bought entirely on borrowed cash (shit, twins were coming and no savings!!). Total value about $15,000
Retirement savings (his and mine): about $50,000+
Debts:
Mortgage: $410,800 at 3.29%, amoritized over 26 years
That maternity leave-related tax bill: about $4000. They charge about 2% interest to make montly payments, which I have opted to do.
Minivan loan: about $7500 outstanding. Interest is variable but in the neighborhood of 5%
All of the above is on my shitlist once we have more cashflow from the rental.
We have no emergency savings, because I threw everything at a previous line of credit that got rolled into the new mortgage (it was from renovations made to our main floor to make the home safe and liveable). I'm of the mind that there's no use putting pennies into a savings account when there is a big Line of Credit emergency hanging around.
The two cars are non-negotiable for us (unless a senior mustachian can make a really good argument). I need to drop the boys off at daycare and get to work (then do it in reverse at the end of the day) in a tight timeframe. The Mr. needs to haul tools and plumbing paraphenalia.
We have seriously considered moving to a smaller town that has cheaper housing. We ruled it out in the end for a few reasons, not the least of which is family. We value being close to our families very much. It is even more important now that we have young children. The other is opportunity for work (now this only matters if one is not retired, right?). Both the Mr. and I would have a hard time making the same money, or having the same opportunity to make money, if we left our current city. I will not move to the suburbs and commute to our same jobs. I see those suckers who sit in traffic twice a day and I won't do it. My commute is about 5 minutes to the daycare, then 10 minutes to work.
Once we have rental income, my plan is to pay off the various debts (tax debt, car loan) and redirect the money that previously went to those monthly payments. I want to pay down the mortgage, increase our retirement savings and save more for the boys' education.
So help me, mustachians! Help me see what I'm missing here! There must be a better way.
xo,
eldub in Victoria, BC, Canada