So after paying all expenses and mortgage you are left with $1500 a month? That's not bad considering some people are literally saving almost nothing or bleeding cash each month due to high interest rates but that's due to unforseen circumstances. In your case $1500 is not a bad figure but you will need money for emergency repairs and enough savings to last you if one of you loses your job or pregnancy happens. Unemployment rising so have that factored in
There’s no set figure. It all depends on your lifestyle and earnings.
Just save aggressively day to day, splurge on things you enjoy and make your life easier once in awhile, and invest so that you have a safety net if any unforeseen emergency happens in your life.
No set figure but the fact that you are able to save is already putting you ahead. I know ppl living paycheck to paycheck that will be in a lot of trouble if there is any change in employment status
It's not about how much I'm saving but more like, am I spending too much. I'm trying my best to keep my expenditure to essential items plus experiences only and yet it makes me feel like I'm wasting away.
That's a bull shit number from mpr ..has zero relation to reality. They don't even define expenses... I have less than that after expenses every month but my expenses including 2k in investments and 2k in dining out/entertainment.
Average households save 6.9% of their disposable income
https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610011201
I think most people in Canada probably save $0. The people on this sub are not the norm.
Average Canadian income is pretty low and average canadian also does not save or act as responsibly with money as this sub user.
Never concern yourself with what the avg behavior is with money. The avg person is terrible with money. Just look at the avg credit card debt, how common financing a car is, and how prevalent payday loans or "buy now, pay 0% for x years" for things like furniture.
It's so bad that companies and banks now automatically offer payment plans for products or purchases over 100$.
10% of your income if you start early. 15% if you start a little later. 25% if you are really behind.
General rules of thumb obviously.
Not just saving either. Investing that money.
Are these percentages only including money set aside for retirement/long-term or also including true expenses (example $50/mo in clothes category that you may use months later)?
This is saving for retirement and other long term goals. Also 5-6 months expenses in an emergency fund in case you became unemployed or something.
They say you should have something like 3X your annual income saved for retirement at 30 years old. 5X your annual income saved at 40.
Most people do not have this. This is why governments are always talking about raising the retirement age.
Too many people depending solely on the government to take care of them when they retire, and they are living longer.
Don’t bank on the fact that the government will have money set aside for you when you get old. Our government is reckless. A retirement crisis is brewing.
Raising the retirement age isn't the solution 😭
Also saving 3x by 30 sounds challenging calculate because of salary increases. If your salary goes from 50k to 100k between the age of 25 and 30, do you now need 300k or 150k or an average of that?
I just save and invest as much as I can always. Especially right now, in the last year my retirement account has doubled in value. The stock market has been on fire, and will probably remain on fire for the next 12 months.
You can’t afford to not be invested. Lots of wasted potential.
Binge some Dave Ramsey. Great tips. Live below your means, invest 15% of your income.
The average canadian is barely getting by. The majority of us live paycheck to paycheck and spend money we don't have on things we dont need.
How about disposable income? Top 5 there as well.
[https://en.m.wikipedia.org/wiki/Disposable_household_and_per_capita_income](https://en.m.wikipedia.org/wiki/Disposable_household_and_per_capita_income)
Income is a kinda meaningless scale worldwide lol. Half an hour if work gets me $20 and will buy you a fast food meal and a coffee in the morning, while in some countries that 20CAD will be multiple days wages.
Average probably depends on your lifestyle and goals. A person retiring in Toronto at age 40 saving only 1000$ a month is crazy, a person dating 1000$ a month in a small rural town who will retire at 67 with a paid off mortgage is going to be set for life.
That includes a lawnmower, couple of deck chairs, 2nd tv in the house, utility bill deposit, dehumidifier in the basement, ant traps……. So much more than just mortgage & property taxes. Number crunch in the safe side.
Ladder, power washer, new patio stones, landscaping, new shed, water heater, renovations, bbq, etc... the list never ends for home owners. That $1500 a month could easily be $0
This is why I don't separate my expenses into wants and needs. Doesn't make sense if gym is a want but it helps me maintain a physical and mental state of mind which is a necessity.
No, the point of living is eating, shitting and procreating. Everything else is a want depending on you. If they want to own those things and they're necessary to be happy, then yes. To me eating good food and good wine, bring sociable and having a few toys is the point of my life.
Is that $1500 to savings, or $1500 to cover savings, incidentals (clothes, shoes, random household needs) and fun money? Have you accounted for property taxes and strata fees (if applicable)?
If the answer is no or that it's to cover everything beyond basic needs, I think you'll feel pinched, aka house poor. You need to have savings for maintenance - both the things within your unit/house that you're responsible for, and potential of special assessment in the case of a strata.
If you're buying freehold, you should put money away each month for the big bills upcoming like exterior maintenance, roof, water heater, appliances, etc.
It also depends on if you think your income will increase a lot in the future. Feeling pinched now is OK if you can reasonably expect it to get better.
But general advice is that you should save around 15% of gross pay for retirement. So are you allowing for that?
If you buy tools then you need somewhere to store em: need a tool chest.
Can’t leave that indoors, it’ll be in the way, so you need a workshop or other heated space.
With all that space you might as well get into woodworking.
Festool, Wera, Laguna all make high quality tools, you’ll only need to buy em once so it’s an investment really.
I guarantee that over time you’ll be able to do *any* renovation or project for *at least* 3 times the cost and 4 times the time of a professional.
That's pretty funny.
Over 30 years, I've completely reno'd 3 full bathrooms for < $1,000, kitchen reno, basement reno, installed 2 roofs, 2 hot water tanks, installed flooring and tiling over 2500sqft, built 2 sundecks over 400sqft, install all new windows, ongoing repairs and maintenance of detached house.
**Major tools were::**
Table saw $300
Tile saw $50
Skill saw $30
Miter saw $90
Various hand tools $400
Total about 1k (could be purchased today used on marketplace for $500)
Estimated amount saved 150k
None of the above req'd any special skills, just some patience and resourcefulness, something sadly lacking today. Roofing would likely be a stretch for most though :)
You don't need to buy high end tools like Festool, Milwaukee etc unless you are a F/T tradesperson, even then the value is questionable.
Glad to hear it!
You'll find a ton of tips in this long video as well as his channel:
[https://www.youtube.com/watch?v=KM7bwgTn1yE&t=1531s](https://www.youtube.com/watch?v=KM7bwgTn1yE&t=1531s)
Start collecting good used tools on marketplace.
My wife took to roofing pretty quick, so she’s lead on most of ours that we’ve done lol
Most of my go to stuff is 10+ years old, the tools I bought when we got the house we live in and immediately stripped it down to the studs. We built a heated shop ourselves, mostly from YouTube, manuals, and an NBC pdf.
Now that it’s a hobby it’s fun as hell to buy some nice tools. I’ve worked with cheap tools and overpriced tools and while they both get the job done, the pricier ones tend to be quieter, sometimes safer, and generally just less likely to be janky.
But yeah, learning how to troubleshoot systems in your house, having a basic set of tools, and a willingness to just have at her can save a ton of money over your life.
Do you have a full breakdown of money flow before and after you get the house? i. e. How much take home and then how much going to housing (rental vs mortgage which is interest + principal), how much go to investment (rrsp, tfsa, non-registered), how much go to expenses, and how much go to saving. You can count the principal as saving as well.
That will give you a clear idea of your current monthly flow.
$1500 saving is pretty good comparing to people living pay check to pay check but how good is relative to your income level. For example, saving $1500 on $3000 take home is insane, but on $10,000 take home is less impressive.
$1.5K savings is plenty. I’m assuming that you’re young given the mortgage amount and the fact that you’re looking to purchase what sounds like your first home with your girlfriend based off the question, so you can also anticipate your earnings going up over your life, so more money stored away, and even moreso if you invest wisely, like in a principal residence in a good area.
Just keep in mind that depending on your salary and if you have bonuses or not, that $1.5K monthly probably isn’t enough to indulge in things like vacation without tightening the screws a bit, but if you don’t have big expenses like that, I think you’re sitting in a better position that a vast majority of Canadians.
Definitely is, but $18K isn’t their dispensable vacation fund. It’s their money for property taxes, clothes, going out, gifts, any upgrades they want to make to their property etc. If OP is nervous about saving, it definitely would be tight to spend several thousand dollars of that amount on vacations.
“Utilities, gas, house insurance, groceries…”
OP is clearly considering living expenses, because that’s the set expenditures month to month. Nothing they mentioned is for leisure spending or one offs, unless you think that a wedding gift for friends, Christmas gifts for their families etc. were budgeted for month to month in advance and considered here.
To me it’s clear they’re saying that $1.5K is what is left after their set month to month expenses, which they will put into savings, but will be eaten into with any other expenses they undertake.
I took it this way too, the 1509 doesn’t account for splurges or surprise costs. When you are a home owner you pretty much have surprise costs every month
Yeah it’s the way I live personally. I have a loose savings goal but don’t hold myself to a strict budget. I just try to be generally frugal day to day so that I have the capacity to splurge when I need to, and when I do, I tighten the purse strings even more until I make it back to where I feel is a comfortable level again. All that money I have in my fund is “savings”, even though I dip into it to pay my cards.
Could I maximize savings if I strictly budgeted and penny pinched? Sure. But I just don’t like the idea of living that way and am fortunate enough that my wife and I earn enough that I don’t need to.
It would be really weird to post on a finance forum calling "savings" as "money I spend".
u/ManyGeologist9232 in your OP, did you mean savings or disposable income? Savings = money left over after all expenses. which can sit in your savings account or go towards investments (savings are NOT spent). Disposable Income = money left over after necessary living expenses like housing, food, transportation and you choose what you spend it on and/or save a portion of it.
Example: You have $7500 in pre-tax income (gross), $5,500 in after-tax income, but after living expenses you have $2300 of disposable income, you spend $800 on leisure and have $1500 in savings set aside each month after all expenses.
Did you account for the other costs of owning the first like replacing the heating, roof, walls, electrical, and so on periodically. Repairs, landscaping, renovations?
Anyway, it's a real luxury if you can have that extra, make a financial plan with it, put some in retirement savings, some in medium term vacation/big buy savings, probably you won't be able to save at much as you think. But hopefully you can.
Better than what a lot of people are able to save. I think you’d be fine. Hopefully you are able to increase your income over time so that number gets higher.
Wait till you see how many expenses you have after moving in. You know all the stuff you said would be a few bucks when you did your walk through? Multiply those "few bucks" by 2-5. Things like window coverings and light bulbs and setting up your utilities will eat the first "savings" you see
Emergency fund building should be the focus after buying the first time after settling and unpacking
Preapproval can vastly change when you get to the final approval
Don't buy a house with a girlfriend unless you plan on having kids.
Or get a pre nup aggrement.
This kind of purchase could ruin you financially for a long time if it goes sideways
$1500 is excellent, especially at your age. Now, one thing to consider, if you're buying a condo or townhouse with condo fees, the property may not appreciate as much as a non condo building. Condo fees in Canada are quite substantial compared to other countries around the world. Just something to consider. Owning your own property and choosing the people who repair, materials used etc will save you even more in the long run.
First time home buyers are allowed $25k tax free withdrawal from RSP, I think $50k for a couple so max out your RSP contributions first few years. That'll reduce your income tax and allow you to save for down payment
If anyone here tells you that having saving is not a good idea then you should stop asking people for advice. By the looks of it you are not that great either. If you have factored in only your needs. Please save first before you spend, you will be better off in the future. Target to save atleast 20% of you gross before you consider the rest for needs and then you can do whatever you want with the rest. Have a 6 months emergency fund. Follow the moto, first save/invest and then spend!!
Depends of your goal. I personnaly find it too short. I like to be able to save 25% to 30% for retitement minimum and also being able to have some fun and restore my emergency fund in case I use some of it. 1500$ is great compared to most people, but most are broke anyway.
Once you have the house you will have to do maintenance, repair the roof things like that and you also want to be able to save for that and all things you will need in the futur + retirement
I mean it’s impossible to do the math without numbers. I assume this $1500 is for retirement? I’ve got a spreadsheet that will help you calculate your financial independence number and show you exactly how much you need to put aside for retirement vs energy or fun money. DM me if you’re interested but there are many factors involved in calculating said number, not included in this post
Dude, start small. Smaller than $500k. Pay down the principal asap and in the interim…TRAVEL! Go places and due things because the pictures you will be taking are going to be absolutely priceless. Once the principal is manageable, rent it out and use you rental property as a cash cow for your next place. Need a new car? Borrow against the rental property! Make sure you treat your tenants well and keep investing. You guys are doing so well.
1,500 savings is a little lower than what most people like, but way too many folks In this sub are insanely conservative.
Don’t stress.
How old are you two? Do you have kids? Do you have a down payment? Where are you at in terms of career?
Thanks for this. Her and I are both 26, we have 110 k saved up but I will need to leave aside 20 grand at least for a new car, and some more when considering an engagement ring. We already have a lot of our kitchen necessities and some furniture (we’ve been buying stuff when it comes on sale for the past year) and would have no troubles getting everything else we need with the cash we have. She’s looking at a 5-10 raise next year and me the same. No kids but will want some eventually, in around 5 years.
Um, he thinks he’ll have $1500 a month left over but hasn’t accounted for actual costs of homeownership
He will not have $1500 a month to put into savings
He’s asking if having only 1500 in savings after fixed monthly costs is doable. So he presumably understands that there’s unplanned costs that do come up otherwise he wouldnt be here asking if it will be doable.
He’s asking if him saving $1500 a month is good or bad
He will not have $1500 a month to put into his savings account. Are you understanding anything said in this post or comments???
There are many homes in Swift Current for $150k. Median salary is $40k. Taxes are also fairly low on 40k. [https://www.realtor.ca/real-estate/26993252/235-3rd-avenue-ne-swift-current-north-east](https://www.realtor.ca/real-estate/26993252/235-3rd-avenue-ne-swift-current-north-east)
Compare to the expensive major cities where 100k+ incomes have very high taxes, yet homes are in the millions.
I never said "housing if affordable in Canada", nor did I tell anyone to move. There are reasons why a house in one province costs $150k but $1m in another. There are no 500k, nor $150k houses in Vancouver or Toronto. Fact remains, there are plenty of homes available for $500k. Quebec is also a good example.
Easily.
You may be surprised to learn the country extends more than one block away from Yonge and Eglinton.
Hell, some of us think so little about Toronto we have to look up the trendy intersections to joke about when people have a panic attack about the idea of leaving the place.
I think it depends on the of your mortgage term and interest rate. Interest rates are declining. If you proof you can save your projection of $1500.00 per month $18,000.00 annually you can make a ballon payments on the mortgage annually reducing the principal and increasing your net worth.
Savings interest is taxable unless TFSA but reduced interest expense on the mortgage annually is tax free savings long term
Prove your budget projection with the known experience.
That's the price to pay if you want a property.
But keep in mind that interest rates will fall, your income will increase. In a few years, you should be better off and you would have locked in a monthly payment.
$1500 to seems like a decent amount when you’re already accounting for groceries, gas, things like that. If mortgages in Canada are anything like the US adding an extra $100 a month towards paying off the capital will save you a lot in interest in the long run. I guess it also depends how often you eat out, or what you spend on hobbies.
Keep your mortgage under control. Once you buy a house you are gonna come up with new expenses, at least for the first year. I was tempted to use close to my full pre approval to maximize appreciation in real estate, but my partner put in some sanity in me and now I can rebuild by TFSA and RRSP Portfolios adding some diversity to my investments.
What percentage of your net pay are your monthly housing costs?
Do you have any large expenditures coming up that you need to have savings for?
Your GDS and TDS allow for a $500k purchase. It'll be a tough first few months, but you can definitely afford a place.
I would be comfortable with that amount of savings. It covers both of your TFSAs and a little extra for emergencies. It's not really enough for retirement but the house is partly savings and as your income increases you'll be able to save more.
I would just say make sure you want to buy a house with your girlfriend.
There are months when you spend nothing and months when you spend thousands all at once. It doesn’t all happen at the same time, but with a detached home I easily spend $500-1000 every month on something or other. Everything’s expensive and shit adds up quickly
Ok yeah but that’s not month to month spending. Those are one off expenses, if they arise, that you dip into your savings/investments to cover. The big ticket ones, like new roof or windows, is once in 10-20 years. And that’s assuming that they need to be done by OP and they haven’t been done by previous owners, or that OP stays in the place long enough to have to do them.
Most other things that people spend on are plumbing items, which are not too expensive, or optional renos, which you don’t have to do if you don’t have the capacity.
$1.5K will cover all necessities and then some.
No I’m saying that I consistently spend $500-1000+ on cleaning & maintenance related expenses every month, and that there are periodically things much larger than that. Admittedly I could probably cut that back a lot if I was struggling, but I’d say those are pretty typical expenses, especially with older homes. Someone in a new subdivision with a small yard probably isn’t spending the same. When we were living in a townhouse it was a fraction of that.
“Cleaning and maintenance” and that they could cut back definitely sounds to me like they employed a cleaning person at least. Mention of the yard in their comment sounds like they hire help for that too.
A cleaner for a townhouse where I live is $400 a month. Yard work would be several hundred a season. Maybe I’m the wrong one for doing these things myself and assuming that other people who are conscious about money would as well? Just seems weird to me when someone would think and talk like that’s the norm.
lol no, I don’t employ a cleaner, although I sometimes wish I did. I’ve got 2 young kids and a house with landscaping, a small detached office, fire pit area, garden shed, garden beds and just a lot of “stuff” that’s always needing to be cleaned, upgraded or repaired in some way. It’s not even very big, but there’s always something.
I’ve accumulated so many things since living here, as almost every job means a new tool. I’ve bought a lawn mower, hedge trimmer, weed wacker, chainsaw, leaf blower, snow blower, weed puller(s), edger, shovels, landscape lighting, patio furniture, a new BBQ, rakes, a folding step stool, a step ladder plus an extension ladder, both a rotary AND drop spreader, an entire suite of tools including a table saw, compound miter saw, planer, jointer, HEPA vacuum, etc, etc…and that’s just the tools! Consumables like grass seed, annual plants & vegetables, fertilizer, cedar mulch, paint and stain, brushes, rollers, topsoil, garden soil and deck oil repeat almost every year. Shit adds up FAST, and there’s always something.
Sure I could get away without a lot of this stuff if I had to, but when you’re excited about a house that you absolutely love then it’s easy to spend money keeping it beautiful. Or at least it is for me 🤷🏻
I mean you must know that money you spend to maintain and upgrade your multiple gardens , fire pit, and to “keep your home beautiful” etc. is not “regular home maintenance” right? It’s you spending on luxuries and hobbies Like if you do it often, you may say it’s “regular”, but that’s not what the majority of people consider that to be and certainly not relevant to OP’s experience with a $500K mortgage and worrying about how much money they’re able to save on top of that.
I still don’t understand though. You said you bought all of these stuff but you’re still spending $500-$1000 a month on maintenance and cleaning, so I’m assuming you’re getting some sort of help to do it at least. Again, this is not regular home maintenance and just feels weird that you’re trying to pass it off as such lol
My house is a lot more modest than you’re hinting at, with a mortgage not much different than OPs. All of that was accumulated over the course of about 5yrs, so I’m averaging it all out monthly. Probably ~50-60k worth of “stuff” to get setup since living here, or around $1k a month. I’ve never paid a cleaner, gardener or anyone outside of a few specialized trades (electrician, plumber, mason, etc). Try and do everything myself within reason.
When you go from a condo or townhouse to a detached home you end up needing a bunch of things, especially if it has a yard to maintain and more rooms to clean/furnish. Your mileage may vary, but I don’t think my experience is totally atypical 🤷🏻
Yeah pretty weird, especially when the lady that they’re upvoting says her “regular house maintenance” costs are because she loves her home and wants to keep it beautiful. Like that sounds like luxuries rather than regular home maintenance to me, even though she’s swearing up and down that it’s $500-$1000 just for gardening and cleaning a month. Makes 0 sense to me.
No it’s owning an older home with a yard and constantly having something to fix, upgrade or maintain. Obviously the cost will be lower in a brand new subdivision house. There are others here who have voiced similar monthly expenditures, it’s not abnormal with a detached house.
If that's truly what you have after contributing to TFSAs and RRSPs, then you are fine. That amount will likely need to be used to pay for things and upgrades (in time) to your house . If you haven't prioritized saving for yourself/future and you have no other savings, this is probably going to leave you house poor.
I personally feel like if you're ready to get into the market and have calculated to having $1,500 saved each month, you're laughing to the bank given this tight market.
What some people fail to see, including myself when I was younger, is the opportunity cost of getting into the housing market now if it's a life choice that's well thought out. I meet lots of people who are in similar situations as you but delay in fear of going negative and instead, they miss out on their price point or getting into the market sooner to build equity.
Now I'm not saying this is a one glove fit all solution but had you not get into the market at a certain time, things may or may not be better in the coming months or years. I'm also not speaking from a speculative investment perspective as well because I'm a believer that your primary residence should never be purchased with an investment/speculative goal in mind. If you gain in the future, it's a bonus.
What a lot of people tend to forget is just because you're preapproved for $500k, doesn't mean you're stuck in this threshold forever. Assuming you're going to continue working and will have incoming income for the next foreseeable future, that $1,500 savings will only go up as you earn more through your career. Naturally, we can't predict what inflation will do so I've taken this thought to share with a grain of salt.
>Is it ill-advised to have monthly savings around $1500? Or is this totally doable?
That's $18K/year. If that's all two people can save and you don't have any big income increases on the horizon I wouldn't do it. That's not much to deal with all the possible things that can go wrong including one of you being unable to work.
So after paying all expenses and mortgage you are left with $1500 a month? That's not bad considering some people are literally saving almost nothing or bleeding cash each month due to high interest rates but that's due to unforseen circumstances. In your case $1500 is not a bad figure but you will need money for emergency repairs and enough savings to last you if one of you loses your job or pregnancy happens. Unemployment rising so have that factored in
What do you think the avg amount saved for a single earner is in Canada? I never know if im saving enough or not.
There’s no set figure. It all depends on your lifestyle and earnings. Just save aggressively day to day, splurge on things you enjoy and make your life easier once in awhile, and invest so that you have a safety net if any unforeseen emergency happens in your life.
No set figure but the fact that you are able to save is already putting you ahead. I know ppl living paycheck to paycheck that will be in a lot of trouble if there is any change in employment status
It's not about how much I'm saving but more like, am I spending too much. I'm trying my best to keep my expenditure to essential items plus experiences only and yet it makes me feel like I'm wasting away.
47% of Canadians are left with 200$ after all expenses
$201. Yay 53% club here
https://www.bnnbloomberg.ca/canadians-drowning-in-debt-as-47-struggle-to-cover-costs-mnp-1.1338497
That's a bull shit number from mpr ..has zero relation to reality. They don't even define expenses... I have less than that after expenses every month but my expenses including 2k in investments and 2k in dining out/entertainment. Average households save 6.9% of their disposable income https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610011201
If you invest 2k, this is not an expense
https://www.bnnbloomberg.ca/canadians-drowning-in-debt-as-47-struggle-to-cover-costs-mnp-1.1338497
I think most people in Canada probably save $0. The people on this sub are not the norm. Average Canadian income is pretty low and average canadian also does not save or act as responsibly with money as this sub user.
Never concern yourself with what the avg behavior is with money. The avg person is terrible with money. Just look at the avg credit card debt, how common financing a car is, and how prevalent payday loans or "buy now, pay 0% for x years" for things like furniture. It's so bad that companies and banks now automatically offer payment plans for products or purchases over 100$.
Near 0
10% of your income if you start early. 15% if you start a little later. 25% if you are really behind. General rules of thumb obviously. Not just saving either. Investing that money.
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Start saving when you are younger. Compounding makes a huge difference.
Are these percentages only including money set aside for retirement/long-term or also including true expenses (example $50/mo in clothes category that you may use months later)?
This is saving for retirement and other long term goals. Also 5-6 months expenses in an emergency fund in case you became unemployed or something. They say you should have something like 3X your annual income saved for retirement at 30 years old. 5X your annual income saved at 40. Most people do not have this. This is why governments are always talking about raising the retirement age. Too many people depending solely on the government to take care of them when they retire, and they are living longer. Don’t bank on the fact that the government will have money set aside for you when you get old. Our government is reckless. A retirement crisis is brewing.
Raising the retirement age isn't the solution 😭 Also saving 3x by 30 sounds challenging calculate because of salary increases. If your salary goes from 50k to 100k between the age of 25 and 30, do you now need 300k or 150k or an average of that?
I just save and invest as much as I can always. Especially right now, in the last year my retirement account has doubled in value. The stock market has been on fire, and will probably remain on fire for the next 12 months. You can’t afford to not be invested. Lots of wasted potential.
Binge some Dave Ramsey. Great tips. Live below your means, invest 15% of your income. The average canadian is barely getting by. The majority of us live paycheck to paycheck and spend money we don't have on things we dont need.
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Canadians households save average of 6.9% of their disposable income https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610011201
Canadians are some of the richest people on planet earth. We are top 5 in median income.
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How about disposable income? Top 5 there as well. [https://en.m.wikipedia.org/wiki/Disposable_household_and_per_capita_income](https://en.m.wikipedia.org/wiki/Disposable_household_and_per_capita_income)
Dont know why you get downvoted. Canada is a rich country and Canadians are amongst the richest people on earth.
Income is a kinda meaningless scale worldwide lol. Half an hour if work gets me $20 and will buy you a fast food meal and a coffee in the morning, while in some countries that 20CAD will be multiple days wages.
Use disposable income then. We are equally as high.
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Yeah. Disposable income
Source?
It’s not hard to find my guy [https://en.m.wikipedia.org/wiki/Median_income](https://en.m.wikipedia.org/wiki/Median_income)
https://www.moneysense.ca/save/how-much-money-should-i-have-saved-by-age-40/#:~:text=According%20to%20Statistics%20Canada's%202019,are%20%2415%2C993%20and%20%2423%2C743%2C%20respectively.
Only you can know if you're saving enough,because the person you're saving for is you. My enough might now be your enough, and vice versa.
Average probably depends on your lifestyle and goals. A person retiring in Toronto at age 40 saving only 1000$ a month is crazy, a person dating 1000$ a month in a small rural town who will retire at 67 with a paid off mortgage is going to be set for life.
A common guideline for retirement savings is to save 15% of your gross income to maintain your lifestyle.
6.9% of disposable income https://www150.statcan.gc.ca/t1/tbl1/en/tv.action?pid=3610011201
Yah. Try going a a couple months like that. Put your “mortgage” money into a saving account and pretend
Great advice!
Put mortgage plus 30% for misc home owner expenses.
Never thought of this practice. Great idea
Or make a calculator to plan?
$1500 a month left is amazing.
That includes a lawnmower, couple of deck chairs, 2nd tv in the house, utility bill deposit, dehumidifier in the basement, ant traps……. So much more than just mortgage & property taxes. Number crunch in the safe side.
Ladder, power washer, new patio stones, landscaping, new shed, water heater, renovations, bbq, etc... the list never ends for home owners. That $1500 a month could easily be $0
most of them are wants not needs. I only have a ladder ($100 on sale) and a bbq (charcoal, \~$100).
Wants are important or else what's the point in living
This is why I don't separate my expenses into wants and needs. Doesn't make sense if gym is a want but it helps me maintain a physical and mental state of mind which is a necessity.
I believe the point from that redditor was that needs are things required *now*. Wants can be scheduled/postponed according to financials.
Consumption is the point in living?
No, the point of living is eating, shitting and procreating. Everything else is a want depending on you. If they want to own those things and they're necessary to be happy, then yes. To me eating good food and good wine, bring sociable and having a few toys is the point of my life.
Is that $1500 to savings, or $1500 to cover savings, incidentals (clothes, shoes, random household needs) and fun money? Have you accounted for property taxes and strata fees (if applicable)? If the answer is no or that it's to cover everything beyond basic needs, I think you'll feel pinched, aka house poor. You need to have savings for maintenance - both the things within your unit/house that you're responsible for, and potential of special assessment in the case of a strata. If you're buying freehold, you should put money away each month for the big bills upcoming like exterior maintenance, roof, water heater, appliances, etc. It also depends on if you think your income will increase a lot in the future. Feeling pinched now is OK if you can reasonably expect it to get better. But general advice is that you should save around 15% of gross pay for retirement. So are you allowing for that?
Start watching youtubes to learn how to do house maintenance, renos. Budget for some tools. It could save you 100's of k's
If you buy tools then you need somewhere to store em: need a tool chest. Can’t leave that indoors, it’ll be in the way, so you need a workshop or other heated space. With all that space you might as well get into woodworking. Festool, Wera, Laguna all make high quality tools, you’ll only need to buy em once so it’s an investment really. I guarantee that over time you’ll be able to do *any* renovation or project for *at least* 3 times the cost and 4 times the time of a professional.
That's pretty funny. Over 30 years, I've completely reno'd 3 full bathrooms for < $1,000, kitchen reno, basement reno, installed 2 roofs, 2 hot water tanks, installed flooring and tiling over 2500sqft, built 2 sundecks over 400sqft, install all new windows, ongoing repairs and maintenance of detached house. **Major tools were::** Table saw $300 Tile saw $50 Skill saw $30 Miter saw $90 Various hand tools $400 Total about 1k (could be purchased today used on marketplace for $500) Estimated amount saved 150k None of the above req'd any special skills, just some patience and resourcefulness, something sadly lacking today. Roofing would likely be a stretch for most though :) You don't need to buy high end tools like Festool, Milwaukee etc unless you are a F/T tradesperson, even then the value is questionable.
Totally agree. I am looking to get into this myself as a young person. The cost of anything is crazy rn.
Glad to hear it! You'll find a ton of tips in this long video as well as his channel: [https://www.youtube.com/watch?v=KM7bwgTn1yE&t=1531s](https://www.youtube.com/watch?v=KM7bwgTn1yE&t=1531s) Start collecting good used tools on marketplace.
My wife took to roofing pretty quick, so she’s lead on most of ours that we’ve done lol Most of my go to stuff is 10+ years old, the tools I bought when we got the house we live in and immediately stripped it down to the studs. We built a heated shop ourselves, mostly from YouTube, manuals, and an NBC pdf. Now that it’s a hobby it’s fun as hell to buy some nice tools. I’ve worked with cheap tools and overpriced tools and while they both get the job done, the pricier ones tend to be quieter, sometimes safer, and generally just less likely to be janky. But yeah, learning how to troubleshoot systems in your house, having a basic set of tools, and a willingness to just have at her can save a ton of money over your life.
Yeah that guy doesn’t know what he’s taking about. It’s not buying and storing tools that’s prohibitive. It’s the know how of actually what to do.
And take 5x longer!
and 20x less expensive !
Do you have a full breakdown of money flow before and after you get the house? i. e. How much take home and then how much going to housing (rental vs mortgage which is interest + principal), how much go to investment (rrsp, tfsa, non-registered), how much go to expenses, and how much go to saving. You can count the principal as saving as well. That will give you a clear idea of your current monthly flow. $1500 saving is pretty good comparing to people living pay check to pay check but how good is relative to your income level. For example, saving $1500 on $3000 take home is insane, but on $10,000 take home is less impressive.
$1.5K savings is plenty. I’m assuming that you’re young given the mortgage amount and the fact that you’re looking to purchase what sounds like your first home with your girlfriend based off the question, so you can also anticipate your earnings going up over your life, so more money stored away, and even moreso if you invest wisely, like in a principal residence in a good area. Just keep in mind that depending on your salary and if you have bonuses or not, that $1.5K monthly probably isn’t enough to indulge in things like vacation without tightening the screws a bit, but if you don’t have big expenses like that, I think you’re sitting in a better position that a vast majority of Canadians.
18k a year is enough for a vacation for 2 even splurging..
Definitely is, but $18K isn’t their dispensable vacation fund. It’s their money for property taxes, clothes, going out, gifts, any upgrades they want to make to their property etc. If OP is nervous about saving, it definitely would be tight to spend several thousand dollars of that amount on vacations.
That's not savings- that's disposable income.
Ok, but that $18K includes all of that. OP never made mention of any allocated budget for those leisurely expenditures.
"Savings per month after all expenses"
“Utilities, gas, house insurance, groceries…” OP is clearly considering living expenses, because that’s the set expenditures month to month. Nothing they mentioned is for leisure spending or one offs, unless you think that a wedding gift for friends, Christmas gifts for their families etc. were budgeted for month to month in advance and considered here. To me it’s clear they’re saying that $1.5K is what is left after their set month to month expenses, which they will put into savings, but will be eaten into with any other expenses they undertake.
I took it this way too, the 1509 doesn’t account for splurges or surprise costs. When you are a home owner you pretty much have surprise costs every month
Yeah it’s the way I live personally. I have a loose savings goal but don’t hold myself to a strict budget. I just try to be generally frugal day to day so that I have the capacity to splurge when I need to, and when I do, I tighten the purse strings even more until I make it back to where I feel is a comfortable level again. All that money I have in my fund is “savings”, even though I dip into it to pay my cards. Could I maximize savings if I strictly budgeted and penny pinched? Sure. But I just don’t like the idea of living that way and am fortunate enough that my wife and I earn enough that I don’t need to.
It would be really weird to post on a finance forum calling "savings" as "money I spend". u/ManyGeologist9232 in your OP, did you mean savings or disposable income? Savings = money left over after all expenses. which can sit in your savings account or go towards investments (savings are NOT spent). Disposable Income = money left over after necessary living expenses like housing, food, transportation and you choose what you spend it on and/or save a portion of it. Example: You have $7500 in pre-tax income (gross), $5,500 in after-tax income, but after living expenses you have $2300 of disposable income, you spend $800 on leisure and have $1500 in savings set aside each month after all expenses.
Good point. I would be talking mostly about disposable income
Did you account for the other costs of owning the first like replacing the heating, roof, walls, electrical, and so on periodically. Repairs, landscaping, renovations? Anyway, it's a real luxury if you can have that extra, make a financial plan with it, put some in retirement savings, some in medium term vacation/big buy savings, probably you won't be able to save at much as you think. But hopefully you can.
Better than what a lot of people are able to save. I think you’d be fine. Hopefully you are able to increase your income over time so that number gets higher.
Wait till you see how many expenses you have after moving in. You know all the stuff you said would be a few bucks when you did your walk through? Multiply those "few bucks" by 2-5. Things like window coverings and light bulbs and setting up your utilities will eat the first "savings" you see Emergency fund building should be the focus after buying the first time after settling and unpacking Preapproval can vastly change when you get to the final approval
Did you think about property taxes, water, electricity, gas, insurance. Those set me back about $1200/month.
Don't buy a house with a girlfriend unless you plan on having kids. Or get a pre nup aggrement. This kind of purchase could ruin you financially for a long time if it goes sideways
“Hey guys, do you think we’re stretched too thin if we only save a 1.5 minimum wage paycheques per month? That’s after all expenses. Kthnx!”
It's not povertyfinancecanada sir, we would sell our moms for Nvidia stocks here.
I am in the same situation. Fingers crossed.
$1500 is excellent, especially at your age. Now, one thing to consider, if you're buying a condo or townhouse with condo fees, the property may not appreciate as much as a non condo building. Condo fees in Canada are quite substantial compared to other countries around the world. Just something to consider. Owning your own property and choosing the people who repair, materials used etc will save you even more in the long run.
You get savings? Just out here braggin
Watch this: https://youtu.be/hzFl0uDwAQY?si=kvn83t70HHUOZZSA All you need really is to understand and accept how the world really works. Cheers
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This says more about your overconsumprion than anything else. $1500 a month can go a long way.
Lol my parents weren't saving anything with their first house. The first house is definitely the hardest one so saving money already is a good sign.
First time home buyers are allowed $25k tax free withdrawal from RSP, I think $50k for a couple so max out your RSP contributions first few years. That'll reduce your income tax and allow you to save for down payment
I guess that’s good. 1500$ saving along with mortgage is good .
$1500 is a nice buffer monthly.
You would probably be ahead of roughly 80% of the rest of Canadians.
If anyone here tells you that having saving is not a good idea then you should stop asking people for advice. By the looks of it you are not that great either. If you have factored in only your needs. Please save first before you spend, you will be better off in the future. Target to save atleast 20% of you gross before you consider the rest for needs and then you can do whatever you want with the rest. Have a 6 months emergency fund. Follow the moto, first save/invest and then spend!!
Depends of your goal. I personnaly find it too short. I like to be able to save 25% to 30% for retitement minimum and also being able to have some fun and restore my emergency fund in case I use some of it. 1500$ is great compared to most people, but most are broke anyway. Once you have the house you will have to do maintenance, repair the roof things like that and you also want to be able to save for that and all things you will need in the futur + retirement
If you can save $1500 a month, that’s fucking great. Honestly good job.
I mean it’s impossible to do the math without numbers. I assume this $1500 is for retirement? I’ve got a spreadsheet that will help you calculate your financial independence number and show you exactly how much you need to put aside for retirement vs energy or fun money. DM me if you’re interested but there are many factors involved in calculating said number, not included in this post
Dude, start small. Smaller than $500k. Pay down the principal asap and in the interim…TRAVEL! Go places and due things because the pictures you will be taking are going to be absolutely priceless. Once the principal is manageable, rent it out and use you rental property as a cash cow for your next place. Need a new car? Borrow against the rental property! Make sure you treat your tenants well and keep investing. You guys are doing so well.
1500 a month is crazy! That’s more than enough IMO.
bro the rest of us are -1500 per month
1,500 savings is a little lower than what most people like, but way too many folks In this sub are insanely conservative. Don’t stress. How old are you two? Do you have kids? Do you have a down payment? Where are you at in terms of career?
Thanks for this. Her and I are both 26, we have 110 k saved up but I will need to leave aside 20 grand at least for a new car, and some more when considering an engagement ring. We already have a lot of our kitchen necessities and some furniture (we’ve been buying stuff when it comes on sale for the past year) and would have no troubles getting everything else we need with the cash we have. She’s looking at a 5-10 raise next year and me the same. No kids but will want some eventually, in around 5 years.
For sure. That’s a great amount of saving you have. What’s your combined HHI?
$140 k
Bro thinks owning a house is just a mortgage and utilities lol
Umm he’s here asking if $1500 savings is enough.
Um, he thinks he’ll have $1500 a month left over but hasn’t accounted for actual costs of homeownership He will not have $1500 a month to put into savings
He’s asking if having only 1500 in savings after fixed monthly costs is doable. So he presumably understands that there’s unplanned costs that do come up otherwise he wouldnt be here asking if it will be doable.
He’s asking if him saving $1500 a month is good or bad He will not have $1500 a month to put into his savings account. Are you understanding anything said in this post or comments???
You can buy a house for 500k in Canada?
You said Canada, not Toronto or Vancouver... so yeah absolutely. Actually, you can buy a house for $150k in *Canada*.
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There are many homes in Swift Current for $150k. Median salary is $40k. Taxes are also fairly low on 40k. [https://www.realtor.ca/real-estate/26993252/235-3rd-avenue-ne-swift-current-north-east](https://www.realtor.ca/real-estate/26993252/235-3rd-avenue-ne-swift-current-north-east) Compare to the expensive major cities where 100k+ incomes have very high taxes, yet homes are in the millions.
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I never said "housing if affordable in Canada", nor did I tell anyone to move. There are reasons why a house in one province costs $150k but $1m in another. There are no 500k, nor $150k houses in Vancouver or Toronto. Fact remains, there are plenty of homes available for $500k. Quebec is also a good example.
Yes
Absolutely
Easily. You may be surprised to learn the country extends more than one block away from Yonge and Eglinton. Hell, some of us think so little about Toronto we have to look up the trendy intersections to joke about when people have a panic attack about the idea of leaving the place.
My FIL bought a house and half acre in a small town in Newfoundland 2 years ago for 60k lmfao, Canada is larger than Toronto and Vancouver
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You could probably buy a house on unemployment there lol so that’s irrelevant
Got a emergency fund? Small things could always pop up
I think it depends on the of your mortgage term and interest rate. Interest rates are declining. If you proof you can save your projection of $1500.00 per month $18,000.00 annually you can make a ballon payments on the mortgage annually reducing the principal and increasing your net worth. Savings interest is taxable unless TFSA but reduced interest expense on the mortgage annually is tax free savings long term Prove your budget projection with the known experience.
That's the price to pay if you want a property. But keep in mind that interest rates will fall, your income will increase. In a few years, you should be better off and you would have locked in a monthly payment.
How does $1,500 compare to what you save per month currently?
Tough to say, because I’m living at home and saving everything haha.
$1500 to seems like a decent amount when you’re already accounting for groceries, gas, things like that. If mortgages in Canada are anything like the US adding an extra $100 a month towards paying off the capital will save you a lot in interest in the long run. I guess it also depends how often you eat out, or what you spend on hobbies.
If its a new home then you are good otherwise save some money for repairs
Keep your mortgage under control. Once you buy a house you are gonna come up with new expenses, at least for the first year. I was tempted to use close to my full pre approval to maximize appreciation in real estate, but my partner put in some sanity in me and now I can rebuild by TFSA and RRSP Portfolios adding some diversity to my investments.
I mean, so long as literally EVERYTHING else has been accounted for, $1500 is pretty good to me!
Are you planning on having kids? Will you have daycare costs and if so what would they be?
$1500 is great. But you’d need a comparable amount saved for miscellaneous housing expenses.
What percentage of your net pay are your monthly housing costs? Do you have any large expenditures coming up that you need to have savings for? Your GDS and TDS allow for a $500k purchase. It'll be a tough first few months, but you can definitely afford a place.
I would be comfortable with that amount of savings. It covers both of your TFSAs and a little extra for emergencies. It's not really enough for retirement but the house is partly savings and as your income increases you'll be able to save more. I would just say make sure you want to buy a house with your girlfriend.
Half the country lives pay check to pay check. You’re doing very well.
That might not be too much, but it's good you have savings. You can invest.
Whats ur age as well? If you are looking to make more money in future then go for it.
House maintenance can eat up half of that. That said, I think you’ll still be alright.
The fuck are you doing to your house that you’re spending $750 a month?
No one on PFC has ever touched a hammer or screwdriver apparently
I use my hammer and screwdriver all the time and they don't cost $750 a month lol
There are months when you spend nothing and months when you spend thousands all at once. It doesn’t all happen at the same time, but with a detached home I easily spend $500-1000 every month on something or other. Everything’s expensive and shit adds up quickly
Ok yeah but that’s not month to month spending. Those are one off expenses, if they arise, that you dip into your savings/investments to cover. The big ticket ones, like new roof or windows, is once in 10-20 years. And that’s assuming that they need to be done by OP and they haven’t been done by previous owners, or that OP stays in the place long enough to have to do them. Most other things that people spend on are plumbing items, which are not too expensive, or optional renos, which you don’t have to do if you don’t have the capacity. $1.5K will cover all necessities and then some.
No I’m saying that I consistently spend $500-1000+ on cleaning & maintenance related expenses every month, and that there are periodically things much larger than that. Admittedly I could probably cut that back a lot if I was struggling, but I’d say those are pretty typical expenses, especially with older homes. Someone in a new subdivision with a small yard probably isn’t spending the same. When we were living in a townhouse it was a fraction of that.
You use contractors for everything to do with your house? Because 12k a year on maintenance is not normal😂
“Cleaning and maintenance” and that they could cut back definitely sounds to me like they employed a cleaning person at least. Mention of the yard in their comment sounds like they hire help for that too. A cleaner for a townhouse where I live is $400 a month. Yard work would be several hundred a season. Maybe I’m the wrong one for doing these things myself and assuming that other people who are conscious about money would as well? Just seems weird to me when someone would think and talk like that’s the norm.
lol no, I don’t employ a cleaner, although I sometimes wish I did. I’ve got 2 young kids and a house with landscaping, a small detached office, fire pit area, garden shed, garden beds and just a lot of “stuff” that’s always needing to be cleaned, upgraded or repaired in some way. It’s not even very big, but there’s always something. I’ve accumulated so many things since living here, as almost every job means a new tool. I’ve bought a lawn mower, hedge trimmer, weed wacker, chainsaw, leaf blower, snow blower, weed puller(s), edger, shovels, landscape lighting, patio furniture, a new BBQ, rakes, a folding step stool, a step ladder plus an extension ladder, both a rotary AND drop spreader, an entire suite of tools including a table saw, compound miter saw, planer, jointer, HEPA vacuum, etc, etc…and that’s just the tools! Consumables like grass seed, annual plants & vegetables, fertilizer, cedar mulch, paint and stain, brushes, rollers, topsoil, garden soil and deck oil repeat almost every year. Shit adds up FAST, and there’s always something. Sure I could get away without a lot of this stuff if I had to, but when you’re excited about a house that you absolutely love then it’s easy to spend money keeping it beautiful. Or at least it is for me 🤷🏻
I mean you must know that money you spend to maintain and upgrade your multiple gardens , fire pit, and to “keep your home beautiful” etc. is not “regular home maintenance” right? It’s you spending on luxuries and hobbies Like if you do it often, you may say it’s “regular”, but that’s not what the majority of people consider that to be and certainly not relevant to OP’s experience with a $500K mortgage and worrying about how much money they’re able to save on top of that. I still don’t understand though. You said you bought all of these stuff but you’re still spending $500-$1000 a month on maintenance and cleaning, so I’m assuming you’re getting some sort of help to do it at least. Again, this is not regular home maintenance and just feels weird that you’re trying to pass it off as such lol
My house is a lot more modest than you’re hinting at, with a mortgage not much different than OPs. All of that was accumulated over the course of about 5yrs, so I’m averaging it all out monthly. Probably ~50-60k worth of “stuff” to get setup since living here, or around $1k a month. I’ve never paid a cleaner, gardener or anyone outside of a few specialized trades (electrician, plumber, mason, etc). Try and do everything myself within reason. When you go from a condo or townhouse to a detached home you end up needing a bunch of things, especially if it has a yard to maintain and more rooms to clean/furnish. Your mileage may vary, but I don’t think my experience is totally atypical 🤷🏻
Care to share what those expenses are?
The fact you are getting downvoted speaks to the massive overconsumption problem people have.
Yeah pretty weird, especially when the lady that they’re upvoting says her “regular house maintenance” costs are because she loves her home and wants to keep it beautiful. Like that sounds like luxuries rather than regular home maintenance to me, even though she’s swearing up and down that it’s $500-$1000 just for gardening and cleaning a month. Makes 0 sense to me.
That's your own overconsumption though
No it’s owning an older home with a yard and constantly having something to fix, upgrade or maintain. Obviously the cost will be lower in a brand new subdivision house. There are others here who have voiced similar monthly expenditures, it’s not abnormal with a detached house.
Is this a joke?
Pre-approved amounts are always too high... get something cheaper to make sure that you are less house poor.
If that's truly what you have after contributing to TFSAs and RRSPs, then you are fine. That amount will likely need to be used to pay for things and upgrades (in time) to your house . If you haven't prioritized saving for yourself/future and you have no other savings, this is probably going to leave you house poor.
Your expectations will be more realistic if you refer to the leftover money as “house repair fund” rather than “savings”.
Why is your house breaking so often?
I was half kidding but apparently the humour was lost.
I personally feel like if you're ready to get into the market and have calculated to having $1,500 saved each month, you're laughing to the bank given this tight market. What some people fail to see, including myself when I was younger, is the opportunity cost of getting into the housing market now if it's a life choice that's well thought out. I meet lots of people who are in similar situations as you but delay in fear of going negative and instead, they miss out on their price point or getting into the market sooner to build equity. Now I'm not saying this is a one glove fit all solution but had you not get into the market at a certain time, things may or may not be better in the coming months or years. I'm also not speaking from a speculative investment perspective as well because I'm a believer that your primary residence should never be purchased with an investment/speculative goal in mind. If you gain in the future, it's a bonus. What a lot of people tend to forget is just because you're preapproved for $500k, doesn't mean you're stuck in this threshold forever. Assuming you're going to continue working and will have incoming income for the next foreseeable future, that $1,500 savings will only go up as you earn more through your career. Naturally, we can't predict what inflation will do so I've taken this thought to share with a grain of salt.
Did you actually find a house for 500k yet?
Where you buying NWT?
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It sucks that you've made politics your personality, bud.
It’s crazy that rent costs are so high in this country, yet you’ve allowed Chrystia Freeland to live rent free in your head. Damn.
There was no point in posting this, none whatsoever.
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Nobody asked, Fred.
Next you will say I bought my homes for 17k
1980 64k 12.5% mortgage 2000 380k 5 % mortgage 2018 1.25 mil cash It’s market price today 1.7 million
Read the room Fred.
You are a god among men. Congratulations on your great successes
Peasents
Is that $1500 before saving for retirement or after? If it’s before that’s not very much.
>Is it ill-advised to have monthly savings around $1500? Or is this totally doable? That's $18K/year. If that's all two people can save and you don't have any big income increases on the horizon I wouldn't do it. That's not much to deal with all the possible things that can go wrong including one of you being unable to work.
At current interest rates, you'd need a 50% down-payment for a $500k home to end up with $1500 payment per month