Personal Finance

GTA Household Income to Live Modestly

  • Last Updated:
  • Dec 8th, 2018 4:48 pm
Deal Addict
Jul 27, 2017
1870 posts
721 upvotes
GTA
@mech9t5, thanks for posting the detail breakdown (I would say reasonably modest) of $2600/mth or $31,200yr net income & that's before taking into consideration any mortgage & daycare mentioned, clothing, medical/dental bills, RRSP, TFSA, RESP, extra curricular activities, school items, one-off expenses, repairs, replacement household items

imagine a dual income one child couple both on minimum wage, renting (never mind mortgage) paying day care - could they even afford to live a modest lifestyle in the GTA or anywhere in Canada?
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Dec 16, 2005
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porticoman wrote:
Nov 26th, 2018 4:02 pm
@mech9t5, thanks for posting the detail breakdown (I would say reasonably modest) of $2600/mth or $31,200yr net income & that's before taking into consideration any mortgage & daycare mentioned, clothing, medical/dental bills, RRSP, TFSA, RESP, extra curricular activities, school items, one-off expenses, repairs, replacement household items

imagine a dual income one child couple both on minimum wage, renting (never mind mortgage) paying day care - could they even afford to live a modest lifestyle in the GTA or anywhere in Canada?
Renting will reduce costs for property taxes and maintenance fees. And to me extra curricular activities are obviously luxuries. Dental is hopefully paid for by work benefits.

2 people earning min wage is roughly $4k per month after tax. But at that rate with a kid you do get some breaks. HST rebate, child care benefit, etc. My guess is roughly $500 a month.

With $4500 to work with... It is still doable but they are no longer "modest" but poor.

Rent $1500
Hydro $100
Car gas $100
Car insurance $150
Internet $35
Cellphone $100
Food $500
TTC $250
Renter insurance $25

Roughly $2750 including rent.

With $4500, you've still got $1750 left. Day care will be subsidized or you would just go to a cheaper home care that is around $500-$700 a month.

That still leaves you with around $1k for everything else. It is doable but you aren't buying new cars or new houses.
Newbie
Mar 17, 2017
99 posts
37 upvotes
House paid off, so Mortgage $0
Property tax $7200÷12= $600 (in Brampton)
Ulilities (Hydro,water,heating) $450
Internet,TV,Home phone $150
Cell phones $140
Home Insurance $1200÷12 =$100
Auto Insurance $4800÷12 = $400 (2 cars)
Gas $400
[OP]
Jr. Member
Jul 28, 2012
175 posts
32 upvotes
Gk205191 wrote:
Nov 26th, 2018 7:15 pm
House paid off, so Mortgage $0
Property tax $7200÷12= $600 (in Brampton)
Ulilities (Hydro,water,heating) $450
Internet,TV,Home phone $150
Cell phones $140
Home Insurance $1200÷12 =$100
Auto Insurance $4800÷12 = $400 (2 cars)
Gas $400
I'd say the big relief in your scenario is the lack of a mortgage. Without one, it's 100% doable to live very comfortably on a smaller household income. Thanks for sharing.
Deal Fanatic
User avatar
Dec 27, 2009
6828 posts
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Ottawa, ON
mech9t5 wrote:
Nov 26th, 2018 4:21 pm
Renting will reduce costs for property taxes and maintenance fees. And to me extra curricular activities are obviously luxuries. Dental is hopefully paid for by work benefits.

2 people earning min wage is roughly $4k per month after tax. But at that rate with a kid you do get some breaks. HST rebate, child care benefit, etc. My guess is roughly $500 a month.

With $4500 to work with... It is still doable but they are no longer "modest" but poor.

Rent $1500
Hydro $100
Car gas $100
Car insurance $150
Internet $35
Cellphone $100
Food $500
TTC $250
Renter insurance $25

Roughly $2750 including rent.

With $4500, you've still got $1750 left. Day care will be subsidized or you would just go to a cheaper home care that is around $500-$700 a month.

That still leaves you with around $1k for everything else. It is doable but you aren't buying new cars or new houses.
Is $1500 rent realistic for a family in Toronto? (I don't live there, but I would think it would be more).
Deal Addict
Dec 4, 2016
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Chickinvic wrote:
Nov 26th, 2018 11:52 am
Really? Sounds like my idea of hell.
That's the price people pay to live in major cities. Teachers and cops in NYC do similar kind of commute. Most of my friends who went to UBC and lived with their parents have similar kind of commute.
Deal Addict
Dec 16, 2005
4523 posts
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Chickinvic wrote:
Nov 27th, 2018 11:53 am
Is $1500 rent realistic for a family in Toronto? (I don't live there, but I would think it would be more).
Don't listen to all the hype about how unaffordable GTA is. It's because everyone wants to live in a luxury condo.

Downtown 500sqft are around $1700- $2000 depending on the location and building.

But... If you are on min wage, you look in places like Brampton which is still GTA. You look for basement apartments. Below is one I found in 1 min. $1600 for 3 bedroom basement apartment.

https://www.kijiji.ca/v-house-rental/mi ... nFlag=true

Edit: few mins more looking. 2 bedroom for $1300. Good for 1 kid and 2 adults.

https://www.kijiji.ca/v-house-rental/mi ... nFlag=true
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Jul 27, 2017
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GTA
Chickinvic wrote:
Nov 27th, 2018 11:53 am
Is $1500 rent realistic for a family in Toronto? (I don't live there, but I would think it would be more).
yes & some very good apartments, not social housing or in an unsafe area

our son lives in Bloor Village, near the Humber River/old Mill area, just west Jane subway line, all the amenities.

it's a really nice building/location, a great superintendent, spotless one-bedroom, pays $1100/mth, a 2-bedroom is $1400 - $1500/mth

.
Last edited by porticoman on Nov 27th, 2018 5:01 pm, edited 2 times in total.
Deal Addict
Dec 16, 2005
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porticoman wrote:
Nov 27th, 2018 12:18 pm
yes & some very good aprtments

our son lives in Bloor Village, near the Humber River/old Mill area, just west Jane subway line, all the amenities.

it's a spotless one-bedroom, pays $1100/mth, a 2-bedroom is $1400 - 41500/mth
My friend's parents rent out their basement 1 bedroom for only 700$ a month. Near Danforth and Pape. 10 mins walk to subway.
Deal Addict
Jun 20, 2010
1440 posts
678 upvotes
ruchir wrote:
Nov 22nd, 2018 8:19 am
OP, why would you consider buying a house / condo if you want to live modestly?

Cut the house out of the equation and everything will fall into place. It is not like everyone must own a house. You can rent too. And before anyone jump in to say the rents are expensive and same as mortgage payments - consider other expenses that comes with owning the house.
Owning a home is an investment. Sure there are additional expenses but you will certainly get back what you put in plus more in most situations.

A friend argued with me for years about this. His rent was similar to my mortgage. I had to also pay at the time townhouse condo fee/property taxes which totalled around 6k/year and spent 3k on roofing. Over a 5 year period, I profited 200k with expenses accounted for when I sold - which I used along with what was invested to upgrade to a single detached. He moved back to his parents house because they realized they were throwing money away - walked away with nothing.

In 25 years, a homeowner won't have to worry about rent. In 25 years, a renter will need to continue paying rent and worry how they will pay rent when they retire.

As for living modestly with 2 kids, I would say after home purchase+related expenses, 60k savings minimum (100k+ during maternity/daycare period), you should have combined income of 160k-200k

It's crazy to think 100k income is now "poor" and we that a 200k income is to get by.

Edit - number
Deal Addict
Dec 16, 2005
4523 posts
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eclone wrote:
Dec 3rd, 2018 11:12 am
It's crazy to think 100k income is now "poor" and we that a 200k income is to get by.
I think it's crazy you think $200k is required to "get by"
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Apr 23, 2009
1691 posts
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eclone wrote:
Dec 3rd, 2018 11:12 am
Owning a home is an investment. Sure there are additional expenses but you will certainly get back what you put in plus more in most situations.

A friend argued with me for years about this. His rent was similar to my mortgage. I had to also pay at the time townhouse condo fee/property taxes which totalled around 6k/year and spent 3k on roofing. Over a 5 year period, I profited 200k with expenses accounted for when I sold - which I used along with what was invested to upgrade to a single detached. He moved back to his parents house because they realized they were throwing money away - walked away with nothing.

In 25 years, a homeowner won't have to worry about rent. In 25 years, a renter will need to continue paying rent and worry how they will pay rent when they retire.

As for living modestly with 2 kids, I would say after home purchase+related expenses, 60k savings minimum (100k+ during maternity/daycare period), you should have combined income of 160k-200k

It's crazy to think 100k income is now "poor" and we that a 200k income is to get by.

Edit - number
There is nothing wrong in buying a home. But if you must treat it as an investment, one must make fair comparisons.

Anyone who bought houses between 2000 and 2015, made over 100% gain. This is the long and short of real estate investment. That’s abnormal.

It might help to find out how those who bought in 1980s and 1990s fared. The real-estate growth and returns are extremely non-linear and cyclical. The cycles are 15-20 year long.

If you bought now - you don’t know for sure if you would break-even in 5, 10, 15 or even 20 years. I am not saying housing market would collapse or would stagnate. My guess is as best as my dog’s. No one knows. But the cost of house ownership right now is staggering. I am not sure you can take your experience of house ownership from last 10-20 years and apply that forward to make conclusions.

This is not to say that one shouldn’t buy a home. If one can afford it, one should buy if they want their own ‘home’. It is absolutely fine!

Just know that in last 100 years, the real estate has earned an annualized return of little over 3%.

The bottom line is - you should buy a house if you want it and afford it, not because it a great investment.

Not buying now doesn’t mean ‘not buying forever’. Just don’t stretch your finances to buy when you can barely afford it.
Deal Addict
Jun 20, 2010
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mech9t5 wrote:
Dec 3rd, 2018 12:20 pm
I think it's crazy you think $200k is required to "get by"
Mortgage (ideally +10% overpayment), daycare x2, car payments x2, bills/property tax/insurance, internet/phone x2, food x4, clothing and misc expenses, RRSP x2, RESP x2, savings. That's just the necessities. Gifts, vacations, occasional small splurges etc etc.

$10k a month sounds like a lot, but it doesn't get you very far when you live responsibly. Look at the responses in this thread.

This is why 1 kid is enough for me.
Deal Fanatic
Dec 11, 2008
9599 posts
1269 upvotes
I posted this in another thread but to live modestly, we need under $5k a month. But there are many assumptions and those who have more items or higher debt can adjust accordingly. So if this was us, we'd need a minimum $85,000 household income. This does not include savings though....

This is for 2 adults, no children living on subway line so only 1 car, but with 2 TTC users (to commute). Condo townhome.

Mortgage: $1500 (Mortgage was originally ($370k for home)
Main Fees: $600
Utilities: $250
Prop tax: $400
Telecom: $300 (2 cell phone plans, 1 home internet + paying in-laws entire telecom or home phone, internet and tv)
Car: $100 (1 used card maintenance)
Insurances: $125 (1 used car + home insurance)
TTC: $250 (2 riders)
Gas: $75 (1 car, drive a few days a week for errands - no commuting)
Food: $600 (includes groceries + eating out)
Clothing: $75
Misc: $725 (gifts, knickknacks, vacation etc)
Deal Addict
Jul 27, 2017
1870 posts
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GTA
speedyforme wrote:
Dec 3rd, 2018 1:00 pm
I posted this in another thread but to live modestly, we need under $5k a month.

But there are many assumptions and those who have more items or higher debt can adjust accordingly.

So if this was us, we'd need a minimum $85,000 household income.

This does not include savings though....

This is for 2 adults, no children living on subway line so only 1 car, but with 2 TTC users (to commute). Condo townhome.

Mortgage: $1500 (Mortgage was originally ($370k for home)
Main Fees: $600
Utilities: $250
Prop tax: $400
Telecom: $300 (2 cell phone plans, 1 home internet + paying in-laws entire telecom or home phone, internet and tv)
Car: $100 (1 used card maintenance)
Insurances: $125 (1 used car + home insurance)
TTC: $250 (2 riders)
Gas: $75 (1 car, drive a few days a week for errands - no commuting)
Food: $600 (includes groceries + eating out)
Clothing: $75
Misc: $725 (gifts, knickknacks, vacation etc)
+1, thanks for posting that & bringing it over from the 'Rat Race' thread

now that's not poor, it's close to rich in my book

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