Personal Finance

Personal Finance Review - Getting set for Baby

  • Last Updated:
  • Oct 22nd, 2018 11:35 am
[OP]
Newbie
Oct 19, 2018
1 posts
1 upvote
Brossard, Quebec

Personal Finance Review - Getting set for Baby

Hi Guys,

My wife and I are 31 and 33 years old and have our first baby coming in April 2019, we’re thrilled and It’s got us reviewing our finances to make sure we’re ready. We’re looking for some help in assessing the situation and identifying the best next steps.

Household income: $138,000
Owner occupied home: FMV $300,000 in Brossard QC
Home purchased in 2015 - outstanding mortgage $174,400 with CMHC
Current mortgage: 5 year fixed with Scotia @ 2.99%
Renewal date - Jan 2020
Other Debts: Unsecured Lines of Credit $50,000, Student Loan $7,000 and Car Loan $37,000
Good credit ratings 807 and 842 according to Transunion

We’re cashflow positive, and have been reducing our debts each month but it’s slow going. We budget and track spending on Mint and buy only on sale. We contribute to our public sector pensions off the top 11%.

Should we be refinancing the mortgage to get rid of line of credit and student loan debts? Should we wait until the term is up? There is enough money coming on but its going all over the places across 8 banks and just doesn’t seem optimized. Am I asking the wrong question?

Suggestions welcome!

Ryan
7 replies
Deal Addict
Jan 15, 2017
2149 posts
1478 upvotes
With you household income and relatively small mortgage, you should be paying down your debt much quicker than you are. Yours appears to be a spending issue. What was the LOC debt used for? Refinancing debt may lower interest costs but it does not address over spending. I suggest you take a look at current spending and see where the waste is. Babies are expensive. Your costs are going to rise with a new baby and you will need to find that money in your budget now.

No, I would not refinance the mortgage now to include the loc. Your Scotia 5 yr fixed rate mortgage most likely has a high penalty to break the mortgage.
Last edited by skeet50 on Oct 21st, 2018 3:43 pm, edited 1 time in total.
Newbie
May 17, 2018
71 posts
19 upvotes
Similar here, but much higher student loans from my wife.

Ditch the car/car loan and buy a used vehicle in cash so you don't have payments. Best thing ever. My SUV is about to hit 300k and will be replaced by a used minivan come next year (if it even dies).

Get a mechanic you trust or ask around for one. I've put 2/3 of that mileage on, my wife's older car she's had for more than 5 years and it was $2500 and cost maybe $1000 in that time
Deal Fanatic
User avatar
May 8, 2009
9213 posts
4967 upvotes
45.420833°N, 75.69°W
Play the balance transfer promo game to work down that uLOC debt. Even if you and SO can only get say $10k CL each from MBNA, getting the 0%/10 months promo can be a hefty savings on that lumpsum. Check GCR or RSM, there could be other cards with intro BT offers. Feast out of whatever CL you can BT out of. It'll help you pay that high interest debt faster.
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Temp. Banned
Apr 20, 2018
151 posts
69 upvotes
Raise a useful, empathetic, victimless adult.

Don't buy into the "consumer" mentality. This means less, stupid, needless purses/shoes for mom,
and less of the garbage that young men like you and me succumb to.

And suddenly - the answer's right there - crystal clear...
Sr. Member
May 1, 2018
691 posts
356 upvotes
Vancouver
If you two have a tendency to eat out often every week, you should probably stop and start cooking at home. That's the biggest and easiest thing to start with on cutting down spending as the money used to buy your takeout food could be used for diapers, clothes, baby food, formula milk, etc.
Deal Fanatic
User avatar
Jun 11, 2001
8005 posts
407 upvotes
Everything looks fine either than the $37k car loan... which you better run it until the door panels rust off of it. Pay the LOC off (why do you have $50k on it, seems kinda high, i assume house renos). Just hit the biggest interest first. Also talk to a bank and see if they can do some maneuvering if possible to get you better rates/consolidation. Talk to a few banks... they want your business.

Also congrats... kids are scary at first, but then it's awesome (i got 2).

ps. get sleep while you can :)
...zzz...zzz...zzz...

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Deal Expert
Aug 22, 2011
27140 posts
13136 upvotes
Ottawa
Congrats!
What's that $50K LOC debt all about?

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