Personal Finance

Cost of "Grown-up" Life

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  • Apr 16th, 2009 10:18 pm
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Jr. Member
Sep 15, 2008
183 posts
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Don't forget, some of your utilities may be included in your condo fees, i.e. water, natural gas. It varies from building to building.

Someone mentioned condo insurance. Its a good idea to get, but should only run you less than $200 for the year as you only need to insure the contents of your condo (and any upgrades that you make). Also you maybe able to save some more if you group your condo insurance with your auto insurance.

As for groceries they shouldn't cost any more than you are paying now as a student. So you should already have a good idea of what that will run you.

Good Luck! I made a similar move 6 months ago.
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Mar 23, 2009
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Icedawn wrote: Yup, gf and I are both in this stage. Unless something drastic happens, I can accurately predict the next 5-8 years of our professional lives.

I'm trying very hard to put some sort of budget in place before we both start making money and we get accustomed to an unsustainable lifestyle that leaves us handcuffed to our jobs. That is, I want to come up with a realistic budget that doesn't leave us pinching pennies all the time, and then simply automatically transfer the rest into investments/mortgage payments instead of having cash lying around tempting us.
Given that you've lived this long pinching pennies, it actually can be quite easy to continue to do that to a certain extent, even if you have extra money coming in. You might buy some nicer clothes and eat out a little bit more, but it's not as if you suddenly have to buy 10 Armani suits and drop $200 on a meal every month.

Budgeting is nice, but better is thinking twice about the expensive purchases, even when those purchases fit in your budget. I've known a few people in your shoes that went out and bought that Mercedes SUV once the new salary started flowing. Yes they could afford it, but the money may have been better spent paying off those student loans and/or mortgage, etc. and some end up regretting that big purchase after the fact.

Like I said, just ease into it. You'll quickly learn what you need and what your real expenses are going to be. You don't have to pinch as many pennies as you used to, but you don't have to suddenly and drastically change your lifestyle either.
Deal Fanatic
Feb 17, 2007
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Mort Réal, QC
Did I miss it or did you forget to pay yourself too?

RRSPs, TFSAs, "rainy day" fund, etc?
Deal Fanatic
Oct 25, 2003
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WHO wrote: Did I miss it or did you forget to pay yourself too?

RRSPs, TFSAs, "rainy day" fund, etc?
OP has $2000/month left over for these things.
Deal Fanatic
Feb 17, 2007
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Mort Réal, QC
B0000rt wrote: OP has $2000/month left over for these things.
No. This is not "leftover". This needs to be budgeted.
Deal Addict
Apr 1, 2004
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WHO wrote: No. This is not "leftover". This needs to be budgeted.
These questions are being made in the context of a 20+ year savings plan that's taking into account significant events such as building our own home and kids. I've budgeted for primary residence/mortgage expenses, rrsp, tfsa, and unregistered investments separately in order to meet my long term retirement goals.

What I'm particularly interested in knowing is what other types of after-tax expenses I will have in the near future that I'm forgetting about... simply because I've only been working for less than a year and my gf is still in school. We do own a condo already that we intend to live in for the next while so utilities/condo fees are very fixed, but people have already pointed out expenses such as life insurance that didn't even cross my mind.

Responses are very much appreciated!
Deal Fanatic
Feb 17, 2007
6412 posts
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Mort Réal, QC
That's perfect then. I just thought I had missed something cause it didn't look like you had listed any kind of investment in your monthly budget.

Other than that, what I would recommend is that you live a little, too. I mean, saving is nice, being careful is commandable and everything, but it seems like you're probably still in your early 20s, in any case you're beginning your active life, and you will learn how to manage your money by "living". Yes, you'll make some spendings that with retrospective you might have made differently when you'll rethink about it 10 years later, but you shouldn't have any regrets as long as you're comfortable with how you spend your money. It's OK to spend money if you feel you're getting something you need in return ("fun" being part of what you need I assume). It's even OK to spoil yourself and your loved ones once in a while ;)
So long as you keep up your established savings plan, and review it once in a while to make sure it's still fit for you, then you'll be fine.

Every one has different activities/lifestyle, so you might end up with something you forgot in your list and that no one else will have pointed out to you here, but with about 2k/month of leftover money, I'm sure you'll do just fine :) You can always re-adjust accordingly too. I think you left yourself 400$ for dinning out, that means, at an average of 30-40$, you plan on dinning out about 10 times a month? That's 1/3 of the month. So, perhaps in a few months when you'll re-evaluate your budget, you'll realize you spent a bit more on something else, but less on dinning out... it'll even out.
Newbie
May 8, 2007
51 posts
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Icedawn wrote: What I'm particularly interested in knowing is what other types of after-tax expenses I will have in the near future that I'm forgetting about... simply because I've only been working for less than a year and my gf is still in school. We do own a condo already that we intend to live in for the next while so utilities/condo fees are very fixed, but people have already pointed out expenses such as life insurance that didn't even cross my mind.

Responses are very much appreciated!
1. Who's paying for your eventual wedding?
2. You will start drinking better and better (read more expensive) wine, trust me.
3. Any plans for pets? Food and vet bills add up.
Newbie
Apr 13, 2009
26 posts
4 upvotes
Thalo wrote: $70K after tax and after mortgage? I don't think you really need to budget...
Everybody needs to budget regardless of income.

Ever see that show "Til Debt Do Us Part"?

Many of the couples on that show have very large incomes but ended up spending themselves into oblivion because they didn't budget.

If I was the OP I would continue to live somewhat like a student for at least the first year of earning his proffesional salary. You don't "need" a brand new car just because you qualify for the payments.

Stack some cash for a bit then live the lifestyle you want knowing you have a good stash of emergency money.

My $0.02
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Dec 11, 2005
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Icedawn wrote: These questions are being made in the context of a 20+ year savings plan that's taking into account significant events such as building our own home and kids. I've budgeted for primary residence/mortgage expenses, rrsp, tfsa, and unregistered investments separately in order to meet my long term retirement goals.

What I'm particularly interested in knowing is what other types of after-tax expenses I will have in the near future that I'm forgetting about... simply because I've only been working for less than a year and my gf is still in school. We do own a condo already that we intend to live in for the next while so utilities/condo fees are very fixed, but people have already pointed out expenses such as life insurance that didn't even cross my mind.

Responses are very much appreciated!
Things that come to my mind that are potentially under-budgeted:

Groceries. True you have $400 for groceries and $400 for dining out, which for two people should be plenty. Also true, me and my wife spend probably $250 / month max on groceries. But I also know we are far from the norm and most people I talk to spend > $400 per month if they do not eat out much. Anyway this totally depends on what you like to eat so it is just something to consider.

$200 / month for utilities seems low as well. Since you don't have heat as a line item, I assume that should be included there. We are very frugalw ith power in our small home (probably same size as your condo will be) and combining my heat, power, and water, I spend about $250 / month on utilities, and that is here in NB - I know water is more in Ont. than here, while heat and lights are about the same.

Telecommunications - also seems low. From looking at your math it does not seem likely you are including taxes at all - or long distance use, which you should try to figure out and account for (or add to your projected plan)

Car - you really need to break this one down as your $1000 / month could be way high or way low depending on your plans, where you go, etc. You need to break it down into: Payment, car insurance, gas, government fees, and maintenance. All I have is a cheapo '07 Hyundai, all I do is drive it to and from work 5K each way and the occasional 2 hour weekend trip, and if I add all of these things up, I am already over the $900 / month mark. If I had a nicer car it would be significantly more.

My last piece of advice would be this - follow the same rule professionals do for estimating materials at the job site. Do your budget to the best of your ability, and then add 20%. That should be your ACTUAL planned budget number. If you are lucky you'll come in under that.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
Deal Addict
Apr 13, 2003
3284 posts
70 upvotes
KrisYYC wrote: Everybody needs to budget regardless of income.

Ever see that show "Til Debt Do Us Part"?

Many of the couples on that show have very large incomes but ended up spending themselves into oblivion because they didn't budget.

If I was the OP I would continue to live somewhat like a student for at least the first year of earning his proffesional salary. You don't "need" a brand new car just because you qualify for the payments.

Stack some cash for a bit then live the lifestyle you want knowing you have a good stash of emergency money.

My $0.02
I disagree. I don't budget, and have been pretty good at saving a lot of money. Of course, I am cheap, and don't like spending money on things I don't need, so this helps a lot.
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Dec 11, 2005
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KrisYYC wrote: Everybody needs to budget regardless of income.

Ever see that show "Til Debt Do Us Part"?

Many of the couples on that show have very large incomes but ended up spending themselves into oblivion because they didn't budget.
new_vr wrote: I disagree. I don't budget, and have been pretty good at saving a lot of money. Of course, I am cheap, and don't like spending money on things I don't need, so this helps a lot.
I also agree. We have no fixed budget and do OK. We just are not complete morons - like most of the people on that show are.

I watched that show I think twice, both times so completely flabbergasted at how moronic people seem to be with money. I decided I can't watch it anymore, it makes me too depressed as to the general state of society.
To be nobody but yourself - in a world which is doing its best, night and day, to make you everybody else - means to fight the hardest battle which any human being can fight; and never stop fighting. -- E. E. Cummings
Deal Addict
Jan 12, 2008
1230 posts
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Vancouver
Icedawn wrote: So we're doing some budgeting for the coming years and I'm trying to get a sense of how much it actually costs to live "grown-up" and not as a student anymore... particularly, the quality of life of having 70K after-tax for a couple in downtown TO after mortgage (edit 2 - and investments) expenses

My own calculus tells me this is a very good lifestyle, but it's hard to tell whether I'm forgetting fixed expenses that come into play when not a student

70K ~= 6k/month

mortgage - separately accounted for
condo fees - 0.55k (total = 0.55k)
car - 1.0k (1.55k)
groceries - 0.4k (1.95k)
utilities - 0.2k (2.15k)
telecommunications - 0.15k (2.3k)
entertainment - 0.3k (2.6k)
dining out - 0.4k (3.0k)
property tax - 0.4k (3.4k)
life insurance - I have no idea actually... few hundred?
home maintenance/repair/furniture - 0.6K (4.0k)

leaving about 2.0k-(cost of life insurance) for any additional random expenses...

so... what else am I forgetting that I should be accounting for?

*edit 1*
Thanks for all the comments thus far, very helpful actually. Nice since I likely won't be quite as frank with friends IRL

- Property tax, insurance, forgot about those, thanks.
- clothing/vacation I'll include in discretionary spending (although who knows if my gf considers those discretionary...)
- kids... 6-8 years before that happens so we'll have to reevaluate then.
- utilities fixed, typo
- telecommunications = 30 for my 7-11 cell phone, 70 for gf's bb, 30 for teksavvy, 20 for landline, 0 for OTA HDTV
- $1000 for car - I actually don't know the true cost. I'm using a number my friend gave me yesterday for what it costs for a car. Actually spending about $100/month on a zipcar membership at the moment. What's realistic for gas, repairs, insurance, lease for... dunno, new Civic?
- retirement/rrsps/mortgage are being accounted for separately, interested in whether 70K is too much or too little to budget for actual living expenses.
- home expenses - okay, this is kinda random, i figure 400/month considering my condo cost about 12k to fully furnish and I figure a very conservative average "use" for everything would be three years + a couple hundred per month on avg. for reno costs
Things of Concern:
Car Payments - I am unsure if this is for one car or two, but this is QUITE high for a single car. My friend recently purchased a BMW 335i and his payments are around $1200. But i know someone who leased a 328i for $600. Thats quite a bit of savings and if you are looking for civic, i would guess around $650 for everything ~ insurance, lease, gas. Honda's preowned civics can be financed at 0.9% right now. I've been looking for a car myself.

Condo Expenses - I'm currently in a Bachelor's suite in DT Vancouver and my strata costs about $240 but it really depends on how big your place is. Strata frees hovering around $600/month indicate either a penthouse or a huge 2bed/2bath/den kind of place. And Reno? I find it is rare to renovate unless your place has reached that 10-12 year plateau where everything needs to go. But from what i see on the home network [the shows where they look at the Toronto real estate] there are many newer condos that would not need any fixes. But this may be my misperception.

Entertainment costs - What are these for? Concerts, movies, etc? I think you should set a limit of $500 for dining out and entertainment. Lets say you go to a nicer dinner every week $60/2 ppl. That is $240, and it leaves you with about $250 for random lunches and what not.

Telecommunications - I say cut out the landline. What do you use it for if you both have cellphones. And $70 for the BB?! Say hello to retentions sometime soon.

Utilities - I think you can get them around $200. My gas is covered by strata as is water. So if you find a condo similar to that, its a lot of savings. Also, i don't know if it is my building, but i don't turn on the heat the entire year. I have not even cracked it this winter. The insulation is very good so my electricity bill is always shocking ~ $20/month all year round. And i keep my computer on every night! So those are all the utilities i end up paying.

Anyways, i think if you cut down on these areas, you may end up with $3000 per month. If you are lucky or with a $500 leeway.
KrisYYC wrote: Everybody needs to budget regardless of income.

Ever see that show "Til Debt Do Us Part"?

Many of the couples on that show have very large incomes but ended up spending themselves into oblivion because they didn't budget.

If I was the OP I would continue to live somewhat like a student for at least the first year of earning his proffesional salary. You don't "need" a brand new car just because you qualify for the payments.

Stack some cash for a bit then live the lifestyle you want knowing you have a good stash of emergency money.

My $0.02
I like that show and its just so alarming to see people have such high CC bills, lines of credits, and are still living the high life of eating out every night and going drinking.

Credit cards is a slippery line to debt if you are not careful. And i don't think many people realize this. Many older people have told me over and over again how cash is king. Saving is the best bet right now, or investing in real estate. And remember cars are depreciable assets!!
Deal Addict
Apr 1, 2004
1582 posts
35 upvotes
WHO wrote: ...It's OK to spend money if you feel you're getting something you need in return ("fun" being part of what you need I assume). It's even OK to spoil yourself and your loved ones once in a while ;) ...

Ha - yes, clearly we will still be spending. 700 a month going out doesn't seem cheap to me. =)

georgek wrote: 1. Who's paying for your eventual wedding?
2. You will start drinking better and better (read more expensive) wine, trust me.
3. Any plans for pets? Food and vet bills add up.

Wedding - frick, thanks, forgot about that. Although realistically, we'll likely break even given the asian tendency to give cash.
Wine - again, the asian-ness helps out and makes the wine drinking much less likely =) I hope I never get to the point where I start having $300 bottles of wine at dinner like some of the partners are my firm do.
Pets - again, hm, forgot. We were thinking of getting a cat. Hm, $50 a month?
rems wrote: TTC Passes?

And doesn't your company offer you life insurance as part of your benefit package?

Company is cheap =) And one of the perks of living downtown is that I can walk to work.
KrisYYC wrote: ...If I was the OP I would continue to live somewhat like a student for at least the first year of earning his proffesional salary. You don't "need" a brand new car just because you qualify for the payments.

This is the goal anyways, although at the same time, we spent significantly beyond our means as students, banking on our future incomes. Yes, arguably irresponsible, although arguably a rational approach.

brunes wrote: ...Groceries.... utilities ... Telecommunications

Hm, these three are surprising very accurate. We spend a little under 200 on utilities, and our actual telecommunication costs each month is about $144 (just double checked my credit card bill). So long we don't get cable and continue to use freakishly cheap teksavvy, this should be okay.

brunes wrote: Car - you really need to break this one down as your $1000 / month could be way high or way low ...

Good point. A big part of me thinks I won't actually buy a car until I move out of downtown. Even if I rent zipcars whenever I feel like regardless of the cost, I find it hard to believe it would add up to more than a few hundred a month. At the moment I pretty much use it whenever, and its still at most a 100/month.

thefeebster wrote: Condo Expenses - $600 is high...
Entertainment costs - I think you should set a limit of $500 for dining out and entertainment ...
Telecommunications - cut out the landline. high bb cost...
Utilities - My gas is covered by strata as is water. So if you find a condo similar to that, its a lot of savings.
Investing - Saving is the best bet right now, or investing in real estate. And remember cars are depreciable assets!!

- Nah, 530 are my actual costs, but they'll be going up (I'm on the board)
- I think you're right about entertainment costs, that does seem high. The big problem is that we have a lot of guests who (for the price of a small gift) get to stay cheaply in downtown TO). End up going out with them a lot.
- tell me about the landline, you go and convince my gf that you can have a home with a landline and I'll pay you $10 bucks a month and still come out ahead =)
- utilities - theoretically, isn't it worse if the condo covers gas/water? Statistically you end up paying for all the wasteful people out there, and at the end of the day it doesn't matter if you pay directly or through your condo fees?
- investing - I've surprisingly become really anti-real estate recently. Completely off topic, but currently a big fan of the whole long term indexing strategy. I figure if I keep buying diversified index funds and never sell so as to never realize the capital gains and instead use new funds to rebalance, maybe in 25 years I can retire comfortably off the income/dividend stream without the incredible hassle of property management (saying this as someone who has managed a few rental properties for the last few years). My big issue with real estate is a) the leveraging that most people have to do since they aren't buying their rental property outright and b) the lack of diversification.

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