Personal Finance

This is a model household in terms of frugality and forced savings.

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  • Jan 22nd, 2019 3:02 am
[OP]
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This is a model household in terms of frugality and forced savings.

I'm sure the wife's previous income stream before she became unemployed contributed somewhat to their built-up net worth. Good to know it's quite possible to build up wealth without owning r/e (become a more common scenario nowadays) and most likely through prudent investment strategies.

I can only see myself saving on the club memberships, donations, dental/medical (employee benefit) and phone/internet services. Travel at $6k/year is way below average.

https://www.theglobeandmail.com/investi ... etirement/

Monthly outlays:
Rent $1,475;
transportation $490;
groceries $500;
clothing $100;
gifts $50;
vacation, travel $500;
dining, drinks, entertainment $60;
personal care $75;
club memberships $200;
subscriptions $30;
doctors, dentists $300;
prescriptions $25;
phones, TV, internet $205;
RRSPs $1,000;
TFSAs $915;
pension plan contributions $600.
Total: $6,525.
Surplus of $1,840 goes to savings and investments.
Last edited by alanbrenton on Jan 14th, 2019 2:08 pm, edited 1 time in total.
112 replies
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Jan 12, 2017
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Given no kids, $1.6 m in savings is pretty good, but definitely not spectacular.
alanbrenton wrote:
Jan 12th, 2019 6:31 pm
I'm sure the wife's previous income stream before she became unemployed contributed somewhat to their built-up net worth. Good to know it's quite possible to build up wealth without owning r/e (become a more common scenario nowadays) and most likely through prudent investment strategies.

I can only see my self saving on the club memberships, donations, dental/medical (employee benefit) and phone/internet services. Travel at $6k/year is way below average.

https://www.theglobeandmail.com/investi ... etirement/

Monthly outlays:
Rent $1,475;
transportation $490;
groceries $500;
clothing $100;
gifts $50;
vacation, travel $500;
dining, drinks, entertainment $60;
personal care $75;
club memberships $200;
subscriptions $30;
doctors, dentists $300;
prescriptions $25;
phones, TV, internet $205;
RRSPs $1,000;
TFSAs $915;
pension plan contributions $600.
Total: $6,525.
Surplus of $1,840 goes to savings and investments.
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Nov 24, 2013
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Kingston, ON
Lowish rent / not splurging on housing definitely seems to be helping their savings capacity.
alanbrenton wrote:
Jan 12th, 2019 6:31 pm
Travel at $6k/year is way below average.
¿Que?
If it’s just the two of them, that could be 2-3 week-long Caribbean AI trips a year. I don’t know many people who spend that much.

I understand people with lots of overseas family can dwarf that spending, so I don’t mean to imply I’d judge people for spending more, but $6k/yr seems above average if anything. My wife and I spent about that in 2018, mostly experience splurges during our 10-day Florida trip, and we felt we overspent. Mind you, we’re not flying to Europe/Asia or off taking cruises.
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Mike15 wrote:
Jan 12th, 2019 9:53 pm
Lowish rent / not splurging on housing definitely seems to be helping their savings capacity.



¿Que?
If it’s just the two of them, that could be 2-3 week-long Caribbean AI trips a year. I don’t know many people who spend that much.

I understand people with lots of overseas family can dwarf that spending, so I don’t mean to imply I’d judge people for spending more, but $6k/yr seems above average if anything. My wife and I spent about that in 2018, mostly experience splurges during our 10-day Florida trip, and we felt we overspent. Mind you, we’re not flying to Europe/Asia or off taking cruises.
True. I did realize they were renting very low. When we were renting from 2005 to 2010 in North York, we were already paying $1280 without rental escalation but that saved me having to pay $2k (now close to $4k) taking the Go Train.

I think you are right about the traveling but I've heard so many stories where families would blow $10k easily on a vacation. I cringed when my wife brings up the idea of $2,500/pax Disney Cruises. Heard this time and time again from my professors that with Disney, it's mostly nostalgic parents who want to show their children a good time but there are so many other alternatives that costs so much less. Most children these days aren't really as exposed to Disney characters like Gen X and older generations were in past with those featured annual Disney animation films beginning the early 90's.

Airfare from Canada is probably the biggest culprit with regional coast to coast flights already costing $700 and up per pax. Accommodations alone is going to be at least $150 a night if one isn't going to developing countries where cost of living could much lower but airbnb does offer a good alternative especially for two guests. For a bigger family, sometimes airbnb doesn't make sense as owners want to even charge children below two.

So people like us on RFD who are frugal and capitalize on Amex churning and timing of these travel deals on YYZdeals (and other travel deal sites) will be spending a lot less for sure but in my case, I don't let the deals drive my decision factor. I'm not really into travelling so I'd rather visit family who now live overseas.
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Dec 11, 2008
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Not bad. I'm sure they can cut back even more if needed but I guess if they can reach their goals, good on them. I wonder where they rent and what they get for that cost.

$6k can be plenty depending what you do. Having said that, we collect Aeroplan miles so our airfares are a bit lower and we spend on average $6-$7k a year for 2 weeks abroad.

Although their income is quite high and I am sure their taxes even lower given only 1 of them works now.
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Apr 14, 2006
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St Johns
alanbrenton wrote:
Jan 12th, 2019 6:31 pm
I'm sure the wife's previous income stream before she became unemployed contributed somewhat to their built-up net worth. Good to know it's quite possible to build up wealth without owning r/e (become a more common scenario nowadays) and most likely through prudent investment strategies.

I can only see my self saving on the club memberships, donations, dental/medical (employee benefit) and phone/internet services. Travel at $6k/year is way below average.

https://www.theglobeandmail.com/investi ... etirement/

Monthly outlays:
Rent $1,475;
transportation $490;
groceries $500;
clothing $100;
gifts $50;
vacation, travel $500;
dining, drinks, entertainment $60;
personal care $75;
club memberships $200;
subscriptions $30;
doctors, dentists $300;
prescriptions $25;
phones, TV, internet $205;
RRSPs $1,000;
TFSAs $915;
pension plan contributions $600.
Total: $6,525.
Surplus of $1,840 goes to savings and investments.
With all due respect, $60/month eating out?
Seems very low
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tradinghumble wrote:
Jan 13th, 2019 8:53 am
With all due respect, $60/month eating out?
Seems very low
Do you have to quote the OP to ask that question? :)

I don't eat out alone so zero during office hours. Only when my wife feels like to during weekends because she does all the cooking.

$500 grocery explains it. It's not like they spend $100 at the grocery, right? :)

Clothing at $100/month is stellar lol. Articles of clothing were probably more durable in the past.
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alanbrenton wrote:
Jan 13th, 2019 8:56 am
Do you have to quote the OP to ask that question? :)

I don't eat out alone so zero during office hours. Only when my wife feels like to during weekends because she does all the cooking.

$500 grocery explains it. It's not like they spend $100 at the grocery, right? :)

Clothing at $100/month is stellar lol. Articles of clothing were probably more durable in the past.
I actually think $100 is a lot. We spent a total of average $55/month in the last 3 years and we work corporate so we need business and reg clothes.

I guess we save on shoes and outerwear and accessories since we don't really buy them.
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Mike15 wrote:
Jan 12th, 2019 9:53 pm
Lowish rent / not splurging on housing definitely seems to be helping their savings capacity.



¿Que?
If it’s just the two of them, that could be 2-3 week-long Caribbean AI trips a year. I don’t know many people who spend that much.

I understand people with lots of overseas family can dwarf that spending, so I don’t mean to imply I’d judge people for spending more, but $6k/yr seems above average if anything. My wife and I spent about that in 2018, mostly experience splurges during our 10-day Florida trip, and we felt we overspent. Mind you, we’re not flying to Europe/Asia or off taking cruises.
Must be a nice life ... lol!
Average joe guy here. My annual vacation is up north in the bush...
luckily i think life is throwing me a bone... so im going from one extreme to the other. My partner landed a job @ an airline company. So free unlimited travel for her and her spouse. To anywhere in the friggin world. We made it a point to use all our long weekends and throw in a day off even so we could spend a day in various african, south american and european cities. And a big weeks long one in Asia.
I’m happy!

But yah i agree most people take one trip a year or less unless they have ties overseas.
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Apr 14, 2006
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St Johns
alanbrenton wrote:
Jan 13th, 2019 8:56 am
Do you have to quote the OP to ask that question? :)

I don't eat out alone so zero during office hours. Only when my wife feels like to during weekends because she does all the cooking.

$500 grocery explains it. It's not like they spend $100 at the grocery, right? :)

Clothing at $100/month is stellar lol. Articles of clothing were probably more durable in the past.
I’m not exactly clear on your message but if you meant to imply 500/month in groceries is a lot (hence they spend only $60 per month on eating out) I’d have to disagree, I find hard to stay within $500/month on groceries (have 1 kid), mind you I don’t eat cheap stuff but don’t eat just organic either...

Now, a couple $60/month means they probably don’t go anywhere for the entire month (vegetate and watch TV) or have a Big Mac meal each per week...

I could be wrong
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tradinghumble wrote:
Jan 13th, 2019 4:25 pm
I’m not exactly clear on your message but if you meant to imply 500/month in groceries is a lot (hence they spend only $60 per month on eating out) I’d have to disagree, I find hard to stay within $500/month on groceries (have 1 kid), mind you I don’t eat cheap stuff but don’t eat just organic either...

Now, a couple $60/month means they probably don’t go anywhere for the entire month (vegetate and watch TV) or have a Big Mac meal each per week...

I could be wrong
What I meant is simple. $500 + 60 each month is a reasonable amount for food. There is no reason to doubt the numbers. Surprised you couldn't even understand my original point.

Even my family of four can live with $150/week on groceries.

Maybe you are just not buying the right food at the right time when they are on sale. The Flipp app makes comparison shopping among the nearest grocers easy and we don't even bother going to multiple stores just to save the maximum dollar.

The refrigerator and freezer technology made it possible to buy groceries on sale and stock up for a while.

Maybe you need everything fresh daily but that's likely just your family.
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Jan 7, 2019
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The numbers seem pretty accurate. Looking at my personal finances, I save around $2000 a month after all expenses.
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Jun 14, 2018
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They have way more than they need for retirement. When you take away RRSP, TFSA and pension plan contributions, their expenses are only ~$4,000 a month, or ~$50,000 a year. CPP and OAS should eventually cover at least half of that. If they get to their $2.2 million goal, it's unlikely they'd ever have to touch their principal to just sustain their current standard of living.

This is a case where it might be a good idea for them to own a condo so they don't have to be at the mercy of their landlords as they get older. Plus, they'd get to save around $1,000 a month by not having to pay rent (but taking property tax/home insurance/strata fees into account)
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Apr 14, 2006
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St Johns
alanbrenton wrote:
Jan 13th, 2019 5:01 pm
What I meant is simple. $500 + 60 each month is a reasonable amount for food. There is no reason to doubt the numbers. Surprised you couldn't even understand my original point.

Even my family of four can live with $150/week on groceries.

Maybe you are just not buying the right food at the right time when they are on sale. The Flipp app makes comparison shopping among the nearest grocers easy and we don't even bother going to multiple stores just to save the maximum dollar.

The refrigerator and freezer technology made it possible to buy groceries on sale and stock up for a while.

Maybe you need everything fresh daily but that's likely just your family.
Good for you to be able to feed a family of four with $150/week, it’d never work in my home (I shop at Costco), we spend $600/month and I’m okay with it, I see it as insurance.
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tradinghumble wrote:
Jan 13th, 2019 6:27 pm
Good for you to be able to feed a family of four with $150/week, it’d never work in my home (I shop at Costco), we spend $600/month and I’m okay with it, I see it as insurance.
You value your time more. I value my 10 minutes on Flipp less. You must be making so much even during weekends, I sure don't. Congratulations.

Costco does have high quality meat but they rarely go on sale. Not everything at Costco is cheaper because many don't go on sale as frequently. We don't lock ourselves to Costco.

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