Personal Finance

Budgeting: Why do I feel so poor?

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Sr. Member
Oct 26, 2009
620 posts
24 upvotes

Budgeting: Why do I feel so poor?

I have a question that has been bothering me for a long time. I budget and save but I feel like I never have money. Can anyone give some kind of expert opinion/advice to let me know if I am doing something wrong.

Some info: under 30, married, 1 child
- All debt $6500
- Savings ~70K
- no car
- no house
- no cable
- no cell phone
- 2 scooters (cheap transportation)

Monthly Income:
- ~6000 after taxes and all deductions

Expenses:
- $1200 childcare
- $1270 Home, hydro, water, gas, phone, internet
- $270 transportation, insurance
- $650 groceries
- $300 miscelleneous (gifts, cosmetics, clothing)
- $200 monthly allowence (both for myself and spouse)

Savings:
- $1500 Long term (do not touch)
- $350 vacations, renovations, unforseen
- $100 Baby savings

So the way this budget is, we can't deviate much. We have to save for over a year to get big ticket items and we can't afford a car. It just feels like we might be doing something wrong.
324 replies
Deal Addict
Jul 27, 2006
1113 posts
824 upvotes
Moncton
Simple - your savings are too high. You need to find a balance between living for today and saving for tomorrow that works for you.
Newbie
Nov 20, 2007
33 posts
Toronto
u need cash flow...
invest some safe dividend stocks under TFSA both of you, can bring some extra cash to you each month.
Sr. Member
Aug 14, 2007
562 posts
314 upvotes
Ottawa
Can save $70k under 30? Not bad at all.

First, paid off all your debt, then use the cash as down payment and buy a small house/town house.

My family income is around the same as yours, and I also have a 14 months old child. My wife and I bought our first house in 2006.

Actually, I don't think it is a good idea to keep too much cash on hand. Personally, I only keep around 2~3 months salary in my saving account and use the rest on my mortgage repayment or buy stocks.
Deal Expert
Feb 29, 2008
30106 posts
5547 upvotes
Montreal
Your childcare costs are monstrous. Is that in line what you should be paying in your area? Save some cash and send him/her to university right now. It'll be cheaper!
Banned
Jun 19, 2006
9349 posts
57 upvotes
muchacho_007 wrote: So the way this budget is, we can't deviate much. We have to save for over a year to get big ticket items and we can't afford a car. It just feels like we might be doing something wrong.

Quite frankly, you're doing nothing wrong, and while most people your age have significant negative net worth (esp. after the inevitable housing correction hits), you'll be well in the black, and able to scoop up the assets that they're being foreclosed on.

Just give it time, and make sure you keep your banking costs (direct, and implied, ie: through your investments) as low as possible.

IMHO, forget about buying a house until they are a reasonably priced (ie: you'd be looking for probably a typical middle class detached, and could probably pay $200-$250k for it reasonably, at the absolute most). And then you'll just be laughing all the way to retirement.

And yeah, $15k a year just on childcare seems a bit ridiculous.
"I worked with several H1B employees that were/are borderline ********. One of them wanted to spray an electrical patch panel with solvent to see if it would make the “network go faster”". <--- lol (source)
Sr. Member
Oct 26, 2009
620 posts
24 upvotes
pitz wrote: $15k a year just on childcare seems a bit ridiculous.
That was the one big reason we did not want to have a child was because of the childcare costs - I know some people here do not agree but I don't understand why Canadians do not want national childcare.

The cost of childcare will decrease for us as the baby gets older. It is very high until they reach 18 months (6 x $1200 assuming one year maternity leave) and then they gradually decrease. It could go down to about $700 per month but that is still $8K per year - very high.

That is the reason I was asking in the other thread about discounts on private education JK-gr12. We figure that if we are paying $700 per month on childcare, we not spend the money well and just send the child to private schooling? The problem is that we would need some tax credits from the tuition paid to be able to afford the private schooling. It sucks too because it is just out of reach.
Deal Addict
Oct 14, 2004
1474 posts
438 upvotes
Toronto
Groceries to me also seem a little bit high. My girlfriend and I spend roughly 80-100 per week, and I can't imagine your child eats that much more. Perhaps try to find somewhere a little bit cheaper. If you have a Shoppers Drug Mart near you, they always have lots of good deals on food. My gf and I shop there first, and then buy everything else either at Sobeys, or for a treat, the St. Lawrence Market.
Sr. Member
Oct 26, 2009
620 posts
24 upvotes
audiorichard wrote: Can save $70k under 30? Not bad at all.

First, paid off all your debt, then use the cash as down payment and buy a small house/town house.
70K for 2 people - I don't think that is exceptional.

The salary is also a combined number not just one salary after taxes so probably not exceptional either.
Sr. Member
Oct 26, 2009
620 posts
24 upvotes
UrbanPoet wrote: You have quite a bit of savings.
You don't seem to be doing that bad...
You aren't rich, but you aren't poor either!

What are your goals?
You spend a lot of money per month on savings.
We save a lot monthly to buy a house.

We were initially thinking of buying and investment property but that never materialized in the way the Toronto market was last year or how it is looking to be for the future.

We are trying to be patient about the home purchase but at the same time, I know my partner wants to have a house ASAP.
Deal Addict
User avatar
Jan 20, 2009
3698 posts
119 upvotes
muchacho_007 wrote: 70K for 2 people - I don't think that is exceptional.

The salary is also a combined number not just one salary after taxes so probably not exceptional either.
70k when you dont live at home is exceptional. I don't see how anyone with a life who doesn't still live with mommy can say its easy for 2 people to put 70k in the bank.
Banned
Jun 19, 2006
9349 posts
57 upvotes
zonetbh wrote: 70k when you dont live at home is exceptional. I don't see how anyone with a life who doesn't still live with mommy can say its easy for 2 people to put 70k in the bank.
Yeah, its somewhat above the median for pretty much everywhere in Canada, save certain rich pockets of certain major cities.

I think the conclusion that people can draw from such, is that a lot of people live far above their means, and are due for a crash sooner or later.
"I worked with several H1B employees that were/are borderline ********. One of them wanted to spray an electrical patch panel with solvent to see if it would make the “network go faster”". <--- lol (source)
Member
Dec 8, 2008
434 posts
104 upvotes
zonetbh wrote: 70k when you dont live at home is exceptional. I don't see how anyone with a life who doesn't still live with mommy can say its easy for 2 people to put 70k in the bank.
I agree, I'm always amazed at the amount of people from TO that are thirty-something and still living with the parental units. I think I'd shoot myself after about a week. But to each his own.
Member
Dec 8, 2008
434 posts
104 upvotes
muchacho_007 wrote: I have a question that has been bothering me for a long time. I budget and save but I feel like I never have money. Can anyone give some kind of expert opinion/advice to let me know if I am doing something wrong.

Some info: under 30, married, 1 child
- All debt $6500
- Savings ~70K
- no car
- no house
- no cable
- no cell phone
- 2 scooters (cheap transportation)

Monthly Income:
- ~6000 after taxes and all deductions

Expenses:
- $1200 childcare
- $1270 Home, hydro, water, gas, phone, internet
- $270 transportation, insurance
- $650 groceries
- $300 miscelleneous (gifts, cosmetics, clothing)
- $200 monthly allowence (both for myself and spouse)

Savings:
- $1500 Long term (do not touch)
- $350 vacations, renovations, unforseen
- $100 Baby savings

So the way this budget is, we can't deviate much. We have to save for over a year to get big ticket items and we can't afford a car. It just feels like we might be doing something wrong.
do you have a pension from work?
Sr. Member
Aug 14, 2007
562 posts
314 upvotes
Ottawa
muchacho_007 wrote: 70K for 2 people - I don't think that is exceptional.

The salary is also a combined number not just one salary after taxes so probably not exceptional either.
No kidding, I have many friends, around 30, are still have deep credit card and student loan debt! Therefore, I believe that it is good to get married at younger age, especially true for man, so that he can be more responsiable for himself and his family.

When is the best time to buy your home? Well, I always believe the best time is when you need it. Back to 2004, one of my friend who keep saying he will buy a house when the house reasonably priced. Then he and his wife saved their money in GIC and live in his mom basement. Guess what, up until now, they are still living in his mom basement. Their salary income are not bad, they both work in bank industry.

In your case, I think you should act now. Try to look for an affordable house, buy a house you need, but not the one you WANT. Don't have to worry about the price drop of your property, since you won't sell it for a short period of time.

For the cost of childcare, I think $1200 a month is very reasonable this day. I am paying $1350 for my girl right now. And my family income after taxes is just around $7.5k a month.
Sr. Member
Oct 26, 2009
620 posts
24 upvotes
audiorichard wrote: For the cost of childcare, I think $1200 a month is very reasonable this day. I am paying $1350 for my girl right now. And my family income after taxes is just around $7.5k a month.
Thanks - Do you have any tips for childcare credits, perhaps something not generally known?
Deal Fanatic
User avatar
Sep 13, 2005
6905 posts
417 upvotes
Ottawa
WOW $1200/mth for daycare!!!!!!!!! Man…..it makes me think twice of wanting to have kids! That is a lot of money!!! Might be cheaper to get my parents to move with me and give them the $1200 towards their mortgage or something!!!!

Oh…I don’t know Toronto prices but what about finding a cheaper daycare without sacrificing service/quality? I guess the prices the Kingston YMCA charges is cheap.

Licensed Child Care Centre (16 months – 6 years) Fees:
Toddler $41.00 per day
Pre-school $36.00 per day
Kinder $36.00 per day
Kinder (1/2 day with lunch) $26.50 per day
Deal Expert
Aug 2, 2001
18945 posts
10527 upvotes
I think the big issue you're facing is that you're saving quite a bit. Because you are saving 25% of your after-tax salary you are left with quite the dilemma about wanting material possessions, but not being "able to afford them".

There can be a problem with saving too much, and I think you're encountering it.

I would take a look at your long term goals and adjust your savings appropriately.


It's either that, or adjust your "wants" to fit your financial plan (which includes the 25% savings rate).

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