Hello All,
A bit of a vent and looking for some guidance.
After about three years abroad we are now considering returning home. Our hand has forced itself as we are now expecting our first child and we want to be with friends and family during this major change in our lives. We were successful very quickly which is great but we were expecting a longer process, based on recent family and friends own attempts, and to be able to work and save for a longer period. We are very happy and thankful (and hopeful) that things have gone and will go smooth.
I'm a planner and originally my wife and I had agreed that we would stay a year after the birth as there is no comparison to the financial benefit of this plan. Enter pregnancy and that option was removed rather quickly (which I always assumed was a strong 90% likelihood of happening but I was hoping (financially) that it wouldn't).
Now I'm faced with the prospect of returning home with both of us unemployed, about to have a baby and as soon as a job is secured buying our first home. I'm stressed and doing my best to control that to help minimize additional stress for my wife. Did I mention this is our first child? ......................
Thus we enter the crunch years... we have a good start with a decent downpayment but much of our success has been undermined by the fact that the real estate market has been unsustainably hot in a wide berth around proximity to our family and potential employment. We left because employment opportunities were limited, wages stagnated for decades, and they look like they will continue to be. So where do we go from here?
Current Plan
1. Not overbuy on our home with the idea to keep it our home for 5-7 years (however the debate with my wife is that for a few hundred $$ more a month on our mortgage we could buy a home we can stay in for 20 years, I'm on the fence about it).
2. Pay the 20% downpayment to avoid the extra insurance (100% happening and can be done for both options considered above).
3. Put approximately a years worth of expenses in a TFSA as cushion (fear - of job not paying enough to cover all expenses and to help reduce our stress and settle in)
4. My wife and I will both apply for jobs and the more successful of the two of us will take the job and the other will stay home. I'll have a head start applying for jobs as we will be back a few months before the birth and she can have all the time she needs to recover (3, 6,9, 12 months+). I would prefer to be the SAHP for a variety of reasons but also because I would be the more willing of us to take up a part time job on the side for an income boost.
5. Potential option - We both take the first year off together, live with parents, and take the first year to bask in this experience and provide support to each other. Financially...well, house prices go up 7%-10%. If parents cosigned we might be able to buy and rent it out otherwise I think one of us would need a job to be approved for the mortgage but more research is needed in this.
Any suggestions or recommendations on the above plan and recommendations for surviving the crunch years?
The other factor is I'm about to take a huge psychological blow as my income and thus ability to save for a retirement is about to take a serious hit for the next 3-5+ years. There is no comparison to the income we were able to earn while away and now we will be trying to save $1 here and $5 there while on a single income. We're not extravagant people but when I calculate our upcoming expenses its troubling to see how much I need to earn before even putting anything in to savings. It's not so much a pride thing its more a practical thing and seeing ER/FI slipping off in to the distance. The idea of working for another 35years does not sit well.
Cheers to all! All advice welcome on the crunch years or first child suggestions :)
EcoCanuck