Personal Finance

GTA Household Income to Live Modestly

  • Last Updated:
  • Dec 8th, 2018 4:48 pm
[OP]
Jr. Member
Jul 28, 2012
168 posts
29 upvotes

GTA Household Income to Live Modestly

I'm getting to that age where I might be getting married and starting a family soon. Financially, I have no idea what level of household income a couple with 2 kids would need to live a moderate life. Not talking about a fancy life but let's say 2 basic cars, no fancy vacations and a home which in today's market in the GTA would be around 650k for a townhouse I suppose.

Probably a lot of variables to this question but feedback from others who are already in this boat would be helpful.
121 replies
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Jun 24, 2015
2283 posts
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Woodbridge, ON
$120,000 Dollars Canadian per family should be good to sustain a mortgage, taking care of 2 kids, 2 cars, living in the GTA suburbs. Now ,mind you, you should have atleast $100,000 in savings readily available for stuff like downpayments, buying a car outright in cash ie no financing, and for emergencies, repairs, childcare, and other surprises that pop up, if you can do this, your golden, if not, keep saving and then when you hit the magic number, do it.
Hi
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May 8, 2009
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Can travel on the cheap via CC churning though, so that shouldn't be a financially burdening lifestyle.

Real estate in GTA is still exhorbant.

Middle-class in GTA dual income with kids should aim for $150k/yr household IMO.
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Jun 24, 2015
2283 posts
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Woodbridge, ON
a lot of people do not have high paying jobs and probably were laid off already and have to start their new job from the bottom of the list so it could take a few years of working at your job getting raises, promotions, changing positions to reach a combined salary like that. so if your not there, keep working hard at your job and you will get raises and eventually you will be at that combined salary, remember its COMBINED salary so your wifes salary and yours combined, not yours alone. unless you want to be single lviing in a home like that in the GTDYA (greater toronto durham and york area)
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Deal Guru
Feb 9, 2006
10183 posts
4304 upvotes
Brampton
Ball park Taking home about $8000 a month should be enough cash flow to cover a 500-600k House with 20% down, Daycare costs for 2 kids, utilities & Insurance, operating costs of 2 owned vehicles, no fancy vacations. Assumes Worse case scenario of kids both day care age and interest going to around 5%. Avg'd Op costs of a car at $1000 for both cars. Nominal amounts of RRSP & RESP.

So around 150-160k Gross.
Member
Oct 27, 2014
455 posts
375 upvotes
Toronto, ON
tebore wrote:
Nov 21st, 2018 3:31 pm
Ball park Taking home about $8000 a month should be enough cash flow to cover a 500-600k House with 20% down, Daycare costs for 2 kids, utilities & Insurance, operating costs of 2 owned vehicles, no fancy vacations. Assumes Worse case scenario of kids both day care age and interest going to around 5%. Avg'd Op costs of a car at $1000 for both cars. Nominal amounts of RRSP & RESP.

So around 150-160k Gross.
Sounds about right. and pretty sad. Basically low income lifestyle in the 70s.
Deal Addict
Jul 27, 2017
1870 posts
716 upvotes
GTA
OP, try to rationalize

imagine that you & your other half earn minimum wage, that you need to have two jobs working 75-80 hours a week just to pay all the bills as follows ....

from that there is transportation & I'm saying public transit (no vehicles), rent, utilities, grocery & clothing

no money left for extra's including entertainment. you shop price match, shop at the thrift store & sit at home watching over the air TV. You dont have netflix or internet packages.

now work it backwards & add up all the cost of those individual items, what income you need to cover that & hopefully after all expenses you'll have some money over for holidays or to put into a TFSA/RRSP

all of that before you consider having a family or having the deposit to buy a property in the GTA & to be able to pay the mortgage, insurance, utilities, maintenance ...

to answer your specific question

newly married couple considering buying a $650k property with 20% down (variable rate mortgage approx $2500/mth) + taxes & utilities ($800/mth), 2- vehicles ($500/$600/mth), moderate lifestyle all-in other expenses, with some bells & whistles ($1500/mth) - you'll need minimum $65k - $70k/yr take home pay, nothing left for anything, it's paycheque to paycheque

are you at that point on income & do you have 20% down payment for a $650k property?

last point ... what if there is only one income, can you still do it?
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Dec 27, 2009
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porticoman wrote:
Nov 21st, 2018 4:00 pm
$650k property with 20% down (variable rate mortgage approx $2500/mth) + taxes & utilities ($800/mth), 2- vehicles ($500/$600/mth), moderate lifestyle all-in other expenses, with some bells & whistles ($1500/mth) - you'll need minimum $65k - $70k/yr take home pay
I don't think that would be anywhere near enough take home pay actually. Especially if daycare was also involved (2 kids).
Sr. Member
Apr 14, 2017
812 posts
378 upvotes
DT Calgary
After tax income of $8000 to live a normal life in Toronto or a neighboring suburb. So around 150k gross per year between you and your beautiful wife.
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Jul 27, 2017
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Chickinvic wrote:
Nov 21st, 2018 5:12 pm
I don't think that would be anywhere near enough take home pay actually. Especially if daycare was also involved (2 kids).
agree

in my post 'take home pay ' & 'before starting a family'

and the 'what-if' situations, one income family with children, the single wage earner needs to double their take home pay
Deal Addict
Jul 27, 2017
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my earlier post I posted the 'point numbers' for a couple, no-frills modest lifestyle, no children, with a mortgage,

anyone else care to post specific numbers based on personal experience?
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Feb 1, 2006
9512 posts
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Muskoka
A mortgage above 4.5x household income is considered highly leveraged according to the BoC, so $120k income with a 20% downpayment on a $650k home puts you right on the cusp of that. If you make $60k each, your take home is $45k, or $7,500 combined per month.

That $520k mortgage will run you $2,500 monthly at 3.4%. Property taxes $500, utilities $300, insurance $100, 2 cars all in $1,000, groceries/household for four $800, home repair fund $300. That leaves you $2k for the more variable costs like eating out, alcohol, sports and activities, donations, gifts/birthday parties, clothes, pets, etc. Forget about savings.

If you have daycare, you're screwed for a few years till JK, and even then you will have before/after child costs for maybe 10 years. If rates go to 5% on renewal, that's another $500. If anything big goes on your house in the few years, you're in trouble.

Basically, I would consider it a high risk lifestyle, highly dependent on maintaining that income level. I would say a moderate lifestyle in the GTA would require a very minimum income of $150k combined. If you want to actually live a life, and also maybe retire one day. I would also say that there are very few couples under 30 making that kind of money, and who also happen to have saved $130k downpayments.

My advice to any young couples with job skills that are not GTA dependent, is to look elsewhere. If you're a teacher, nurse, tradesperson, accountant, lawyer, remote worker, entrepreneur, etc, why pay GTA prices when you can live elsewhere for WAY cheaper, and still make the same money, or close to it? Even if you value big city entertainments, you will likely not be able to afford them if you live there.
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Apr 21, 2004
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OP, are you in the GTA? Or are you planning to move here?

Do you live with your parents and can you and your SO live with your parents for the next while?

Biggest expense has to do with housing so if your parents have an in-law suite or an unfinished basement, maybe finishing it and renting for cheap is the best way to go for the first few years.

A lot don't get along with in-laws but we're the minority.
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Jul 27, 2017
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alanbrenton wrote:
Nov 21st, 2018 6:03 pm
OP, are you in the GTA? Or are you planning to move here?

Do you live with your parents and can you and your SO live with your parents for the next while?

Biggest expense has to do with housing so if your parents have an in-law suite or an unfinished basement, maybe finishing it and renting for cheap is the best way to go for the first few years.

A lot don't get along with in-laws but we're the minority.
+1 good points

and on that

OP at the point that you go buy a property, have the down payment, have the income to pay the bills, at some point either in the beginning or later, would you consider renting out part of the space to supplement the running costs?
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Apr 21, 2004
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porticoman wrote:
Nov 21st, 2018 6:14 pm
+1 good points

and on that

OP at the point that you go buy a property, have the down payment, have the income to pay the bills, at some point either in the beginning or later, would you consider renting out part of the space to supplement the running costs?
That was my excuse to my wife not to finish our basement. We don't need the extra space tbh. Child might decide to stay with us lol though she probably detests my gentle reminders about the more important things in life and how I set my frugality as a benchmark. :)

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