Take a look at my budget - Canadian

[Meggslynn]

I thought I would share my income vs. budget and see if there is any room for improvement. I live in Alberta where utilities and the like are sky high and real estate is on the higher end too.

Gross Income - $130,000 (without bonuses)
Net Income - $86,800 (without bonuses, minus 5% each for RPP's)
Monthly Income - $7233.33

Were 30 and 32 years old, one two year old son.

Budget:
Mortgage - $1725.00 (House bought at $280,000, owe $210,000, worth $330,000. Should be paid off in ten years)
Utilities - $80
Heat - $60-$165
Power - $90-120
Property tax - $220
Home Maintenance - $100.00 (our house was severely neglected before we bought)
Internet and Telephone - $85
Daycare - $700
Groceries - $750 (we shop all organic everything as well as humane meat)
Entertainment - $150.00 (includes eating out and once a month babysitter)
Clothes and Gifts - $200.00 (includes Christmas)
Cellphone - $-10.00 (my company gives me $100, my bill is $90)
Life Ins - $91
Home Ins - $86
Car Ins - $156 (two older models, clean records)
Car Maint/Registration - $60 on average
Car Fuel - $275-$320.00
RRSP - $750
Investments - $700
RESP - $100
Savings - $300 (new to me car when this one dies)
Other - $325 (supplements, haircuts, medicine not covered, etc)
Total - $7173.00

Some areas that will probably get attention is the Gas - I work about 20 kms from home in a industrial park. We live as close to work as possible. Biking is not option as the park is gravel roads with no shoulders and big rigs flying by. Both of our cars are smaller.
Other - About $125 of that is natural supplements I take to keep my mental health that I temporally lost after having a child and developing PPD this will probably never be an expense I can lose due to crap-ass genetics in this area.

If you have any ideas I am all ears. I am eager to find a way to put more money away each month.

Thanks in advance.

[Cheddar Stacker]

Caveat here - I don't know much about the Canadian economy, but this is what seems excessive based on local prices for me:

1) Daycare. Obviously with both of you working this is a necessary expense, and you want proper care for your child, but we pay substantially less than that monthly. We also don't have 2 full time jobs. Maybe you can flex your work schedules a bit. You work Tuesday-Friday and spouse works Monday-Thursday to reduce costs by 40%? Maybe there is a cheaper alternative as well that still would provide adequate care.

2) Groceries. I respect your food choices, but that is a huge amount each month. Your grocery and daycare budget almost equals your mortgage, and this is where you can really make a big impact in my opinion. If you have to buy expensive foods, eat less of them, or supplement them with cheaper additives like rice, beans, olive oils, eggs, etc. Have you read this http://www.mrmoneymustache.com/2012/03/29/killing-your-1000-grocery-bill/ ?

3) Insurance. Car insurance seems extremely high, particularly with old cars and clean records. Can you reduce your coverage/increase your deductibles to reduce the premiums? Life insurance is necessary with a small child, but once your assets are close to the coverage levels, consider reducing/eliminating it.

Overall this is close to our monthly picture, although there are some major differences and I think our savings rate is close to 45-50%. It looks like you're saving about $1,850 not counting mortgage principal. So that's somewhere in the 25% savings range. I think with a few small changes you can get that rate up to 30-35%.

On the PPD and health issues I would sacrifice nothing. This is something you need, and don't feel like you need to justify it. Just make sure whatever you need to purchase, you are optimizing the cost as much as possible.

Good luck.

[MsSindy]

the only thing that jumped out to me was $2400/year for clothes and gifts.  It's odd that you paired these two things together.  Not knowing what percentage is clothing vs gifts, it still seems high no matter how you slice it.  I'd figure out what you really NEED for clothes and find alternate places to shop - you may likely find that you have all you NEED, and you can purchase children's clothes fairly inexpensive.  If most of this is for gifts, then maybe you could establish some new traditions....like instead of birthday gifts for relatives, you invite them over for dinner? ..... or quite frankly, just get out of the habit of feeling that you HAVE to purchase something for every event/holiday.

I agree with Cheddar Stacker on the groceries - stay organic, but go for some cheaper choices.  We do something like lentil stew or split pea soup once a week.  Cheap, easy to make, healthy, tasty, and filling!

Otherwise, your expenses don't seem way out of line.

[ThatGuyFromCanada]

I live in Calgary and our budget is very similar for 2 adults and  2 kids. Our food budget is higher (but that also rolls in diapers) and we don't have daycare. I'd say $700/mo for daycare is actually a pretty good deal, in this city at least. I know some people that are paying upwards of $1200/mo!

We're doing the same thing with the $100 per month per child from the government and dropping it right into an RESP so that we can get government matching on government money (c:

[Meggslynn]

Yeah $700 for daycare (actually dayhome) in our small city is pretty good. It will actually go up when we switch him to a learning and creative center when he is 3 years old to $750. We also get to write this off every year at tax time.

Our food budget does cover diapers/pull ups and wipes as well. I am thinking this is about $60 a month as well buy the green ones.

I do agree our food budget is higher but for my area not crazy high. We eat meat only 2-4 times a week, eat leftovers for dinner. Often we have just soup and crusty homemade bread for dinner. I do buy a lot of premade salads in my gourmet grocery for $6 to go with dinner so I don't have worry about a veggie side for dinner. These salads usually last two dinners.

I am going to check into bundling our car insurance with our house to see if that would save any money.

We are saving 10% of our gross (auto deducted from checks into pension) and about 25% net. It just seems to accumulating so slowly.

Clothes and Gifts are probably more like $125.00 for gifts and $75 for clothes. My two year old has a lot of friends he loves from dayhome so we go to a lot of parties at $15-20 a pop. We try to buy most of his clothes used to save money but aren't always able to find what we are looking for.

[Cheddar Stacker]

It just seems to accumulating so slowly.

This is the problem many people have, including me. I see a path, and the ultimate goal at the end, but it seems too far away right now. Look at it on a more quarterly/annual basis vs. the monthly accumulation. It has a much bigger impact that way and makes you really see the progress.

[TrMama]

I'm also Canadian. $700 for daycare is actually a fair price. Make sure you're claiming it on your taxes, I found all those daycare expenses really reduced my income tax liability. Conversely, now that the kids are done with daycare it's freed up so much cash.

You can also file form T1213 with CRA to reduce the amount of income tax that's taken off your paycheck. Since you have daycare and RSP contributions this should make a difference.

If you can, I'd bump up the RESP contributions to $2500/yr. The government grant will give you an extra $500 on top of this and it adds up nicely by the time the child goes off to school.

Are you maxing out your RSP'S? If not, I'd divert some of the investment amount into RSP's to further reduce your tax liability.

[daverobev]

I thought I would share my income vs. budget and see if there is any room for improvement. I live in Alberta where utilities and the like are sky high and real estate is on the higher end too.

Gross Income - $130,000 (without bonuses)
Net Income - $86,800 (without bonuses, minus 5% each for RPP's)
Monthly Income - $7233.33

Were 30 and 32 years old, one two year old son.

Budget:
Mortgage - $1725.00 (House bought at $280,000, owe $210,000, worth $330,000. Should be paid off in ten years)
Utilities - $80
Heat - $60-$165
Power - $90-120
Property tax - $220
Home Maintenance - $100.00 (our house was severely neglected before we bought)
Internet and Telephone - $85
Daycare - $700
Groceries - $750 (we shop all organic everything as well as humane meat)
Entertainment - $150.00 (includes eating out and once a month babysitter)
Clothes and Gifts - $200.00 (includes Christmas)
Cellphone - $-10.00 (my company gives me $100, my bill is $90)
Life Ins - $91
Home Ins - $86
Car Ins - $156 (two older models, clean records)
Car Maint/Registration - $60 on average
Car Fuel - $275-$320.00
RRSP - $750
Investments - $700
RESP - $100
Savings - $300 (new to me car when this one dies)
Other - $325 (supplements, haircuts, medicine not covered, etc)
Total - $7173.00

Some areas that will probably get attention is the Gas - I work about 20 kms from home in a industrial park. We live as close to work as possible. Biking is not option as the park is gravel roads with no shoulders and big rigs flying by. Both of our cars are smaller.
Other - About $125 of that is natural supplements I take to keep my mental health that I temporally lost after having a child and developing PPD this will probably never be an expense I can lose due to crap-ass genetics in this area.

If you have any ideas I am all ears. I am eager to find a way to put more money away each month.

Thanks in advance.

My take:

Utils $80 - is that water?
Heat - Gas? Not bad
Power - electric? Not too bad, probably could go down a bit but if you have electric hot water... Actually, this could go down a bit, just thinking - ours has gone up a LOT lately but we're using cloth nappies
Home maint - usually they say budget 1% a year so I'd suggest doing that...
Internet/phone - do you need a home phone?
Groceries - Even if organic is twice as much as non, and I know it is (but don't pay the organic premium premium - ie not only are you paying more for organic, you're paying more for buying at a small shop as well), you should be able to do $450. If you can, do cloth diapers - might be a bit late now but never mind.
Ents, Clothes, Gifts - $350*a month*?? Woooah. That's a LOT.
Cell phone - Koodoo have unlimited for $60-odd so you can certainly get cheaper than $100!!!
Life ins... do you *need* this? Do you have enough assets to look after your child until they reach 18? Coz if you do.. IMHO you're throwing money away.
Car Ins seems high, but I don't know what it's like in AB; here in ON it was "brutal" for me to begin with when I immigrated but it's getting better - we're at $50 a month with one car only (other car off the road for the winter/wife on mat leave)

$300 on fuel? Small*er* cars? Smaller than an F150? ;) A Civic at 6l/100km.. gas is cheap(er) in AB right? $1/l? So say $6/100km, $12 a week going to work (40km a day x 5) = $50 a month. So how do you spend $300 - not sure how far the other car goes...!

I assume you're putting money into a TFSA? Are you doing Couch Potato investing? Have you heard of the Smith Manoevre - HELOC becomes a tax-deductible investment loan - it's leverage, but with low interest rates might help accelerate your net worth growth..

[Self-employed-swami]

You can't smith manuvre into a TFSA, it has to an investment that earns a taxable income.

[daverobev]

You can't smith manuvre into a TFSA, it has to an investment that earns a taxable income.

Indeed. TFSA should be filled first before any crazy talk like doing SM. But having Canadian ETFs unreg is mmm tasty free (nearly) dividends.

[Meggslynn]

Yeah I agree the gifts, entertainment and clothes is high. I forgot I include a $50.00 monthly donation in the gifts category. I will be the first to admit we are not very mm in the entertainment, gifting and clothing regard. My retirement goals aren't too lofty ... I hope to semi-retire when I am 45/50. I enjoy my work most of the time. But I am also a big-believer in f**k you money. I struggle with the super frugal money hoarder side of me and then the part that says, "well, what if you die before you can every enjoy retirement?"
I am "frugal" probably a tad more for the environment and my anti- consumerism ideals than my ambition to retire super early.
 
I think my focus will be to reduce the entertainment, increase the RESP and RSP and to decrease groceries by $100.00

Some points that were brought up:
We cloth diapered for the first year but its hard to find a childcare provider that is willing to do them.
At this point I don't feel comfortable not having life insurance. I don't believe my assets to be high enough at this point.
My H drives about 35-45Km each way to work and back. His company is opening a new location that is much closer to us in the next year so he is sticking the longer commute out for now.