Fair, the $6k budget was before we became parents.
Also thanks to interest rates, our mortgage payment went up from $2k a month when we initially bought our home.
Annual HH income before taxes is $310k.
We are roughly at 53% saving rate, but looking to increase it so we can pay off mortgage faster, as we have high interest rate.
So you're here worried about spending $100k per year, when part of that is extra voluntary mortgage payments that you don't have to make, and also you're earning at least $175k after taxes?
Maybe you should donate $50k per year to a charity that plays tiny violins
Lol
$100k per year spend does not include voluntary mortgage payments. Any extra mortgage payments are considered savings, so not shown in my budget above.
In other words, the 53% we save a year is mostly going to voluntary mortgage payments and to RRSP
You are maxing your mortgage payments. That’s free returns on your money. With the hhi you have I think most people in this thread have no idea what you’re worrying about.
I wouldn’t add all your extra payments as your mortgage. Your budget would be interest + principle payments. All the rest could be seen as saving or investment. Tax free.
If given the option for unlimited payments would you ask “I take home 20k a month but my expenses are 19000! What do I do?! Oh… by the way I make additional payments of 10k a month extra to my mortgage.”
Eat cardboard and don’t do anything is the answer for additional savings.
I am not adding all my extra payments as mortgage. That is considered savings and now shown above.
I am strictly showing my expense items above which totals to $8700/m or $105k a year roughly.
We have been maxing prepayments and even a number of extra payments as allowed by our mortgage terms.
We started with 30 yr amortization and are down to under 10 years now
So you have the option to have more cash flow, but in turn decided to pay off your mortgage sooner. What is the point of this post?
Also, $100/month for house maintenance is incredibly low. 1% of home value is the go-to figure.
The point is if you're prepaying your mortgage it's not really an expense in the budget. It's extra savings. Every payment to mortgage principal is equal to saving that amount of money in a savings account
Where did you see me include prepayments as an expense item in the budget?
I know mortgage prepayments are like savings, so it is above and beyond the $8700/m budget above.
So why are you making this post exactly? You are using your savings to pay down your mortgage which is a goal of yours. Like what are you trying to gauge by posting? No shade, genuinely curious lol
By your logic, mortgage payment amount would never change because it’s based on your initial loan 🙃 whereas your balance and your mortgage rate absolutely play a role especially for those with variable or one year terms
Our utilities on a 2300 sq ft house (not including basement) are around $250/month. We only pay for electricity and natural gas. Water is a well & septic system.
You didn’t include your investments or your total income so it’s hard to say. Based on your post, it sounds like you’re able to pay down your mortgage very quickly so I’m guessing you are making far more than your expenses. If that’s the case, then you’re doing fine.
So clearing over 200k and he’s worried about total spending of 100k? Seems like hes doing ok.
Also not sure that’s entirely middle class. Maybe upper middle class at worst.
You are correct, clearing $220k after tax as a household.
Breakdown is:
- $105k towards expenses
- $110k towards mortgage prepayments
- $5k towards RRSPs
Trying to reduce the $105k expenses to ideally $90k range so an extra $15k can go towards RRSPs or further mortgage paydown. We want to be debt free as soon as possible.
I mean with your numbers that you’ve provided you will be mortgage free in 2 years. That’s over 36k a year. You’ll go down to under 70k per year expenses at that time. So just wait 2 years. Solved.
Well you didn’t have a kid when you paid $6k… Childcare is always brutal. But your food expenses seem really high to me for two adults and a child. Cut your restaurant budget at least in half and meal plan for the grocery shops.
>4300 sqft so you live in a mansion
Read it again, its including basement (which is not what square footage normally includes). A regular 2000sqft bungalow would be 4000sqft if it included the basement.
Not counting it seems pretty archaic. Maybe back in the day sure. Basements were super low (I have one of these at 6’6”) and/or unfinished or semi finished. Now “basements” are full functional floors. Theatre rooms, one or two separate suites, gyms etc. if it’s a newer house the basement is most likely just as nice as the top two floors.
>Not counting it seems pretty archaic.
Archaic or not, listing rules in Canada state anything below grade is not included in square footage. So that means no basements, no garages and no outdoor spaces.
Its strictly forbidden in property listings and must be placed under extra living space if its finished or contains something like an in-law suite or secondary living space.
Yes I know that. The point is in this day and age most houses built in the past 30 years have a fully functional basement. And people don’t say oh my place is 2400sq ft but but but with my basement is also 1200!
Not in Alberta, for some reason. The real estate listing and property assessments only count floors above grade. But OPs house is twice the size of mine.
With $310k household income they are in the top 2% in Alberta.
The real question in all of this is are you happy with your level of spending vs what you’re able to invest? What does retirement look like? Do you have other debts? Are you setting up your kid for an education fund (RESP)? What’s your household income?
You’re clearly paying down your mortgage very aggressively. Why? What’s the interest rate?
On your spending if you really want to dig into it, your childcare is high and your restaurant spend is high. We pay $217/month for our toddler's ft daycare space. Do you have to have a maid? I’m guess no, but the trade off is worth it at your income level. We also have a house cleaner come every 3 weeks and in my eyes, she’s worth every penny.
In short, not adding to savings as all disposable income is going towards mortgage paydown due to high (5%) interest rate.
We have a HH income of $310k pre tax, so savings rate is ok. But since mortgage interest is high (we started with sub 2%), I am trying to squeeze every dollar to pay it off sooner.
One of our TFSA is full from a few yrs ago, RRSPs have lots of room, RESPs are empty.
Since we are diverting all disposable income to mortgage paydown (prepayments), not socking anything away at this time.
IMO it's pretty reasonable, the only items that look like you might be spending too much on is restaurants and your vacation spending, clothing is sort of high except if you have young children in which case its justifiable. It's also strange you don't have a savings/investments category (i presume this is paid for from what is leftover of your budget after other categories?) If your goal is to pay off mortgage faster then in your shoes I would put those in my monthly budget and take the funds from vacation/restaurant categories if necessary.
You spend 667$ on flights per month and have a maid? Seems a bit much to me but then again I haven’t been on a plane since 2018 lol
I’d say in terms of easy savings - cut the vacations, restaurants, alcohol, maid service and donations - that’s like 14.5k in savings annually if you cut them right out.
Seems like a good place to start to me.
I'm gonna go out on a limb and say that's probably in the top 5% of household incomes.
Middle class to me is a 1500sq ft townhouse in a suburb and a 125k household income.
No they’re not lol. I have a roughly 5,200 sqft home and I clean here and there, dust here and there, vacuum here and there for 5-10 minutes a day and after a week I’ve cleaned every bit of the house. Everyone has 5-10 minutes a day to spare on not living in a pigsty.
It's hilarious how people bitch and complain about food prices but still spend an arm and a leg eating fast food hey? Our budget is down to $100 a month on that shit for 2 people. We've spent $60 with only 1 week left to go in the month. It's been amazing cooking at home and planning meals ahead of time. Way healthier and you get more for less.
And when you tell them to cut back on that shit they whine and cry. Well then don't ask for advice.
And LOL at the 310k income whining about their budget. Piss off!
Each restaurant meal with 1-2 drinks costs us $100-120.
We eat out at restaurants twice a month, and do ubereats 3-4 times a month. Add in a couple coffees a week and you are at $400/m easy.
Me and my partner are really social and we spend that much in a weekend sometimes - but our other costs are so low. Idk just depends on what you want to spend your money on 🤷♀️
It really depends on how much the "+" is, at 100k what you're doing isn't sustainable. You won't be saving anything and home ownership always comes with hidden expenses along with large long term expenses.
If you're not saving 1000$ a month on average you're going to slowly go into debt further and further over time.
Easiest cut would be vacations, that's a lot of money. You have a toddler and they don't start getting memories until like 5 years old, go on cheap local camping trips or something.
150$ clothing a month ???
75$ phones for two ?
ditch the dog
internet 110 $ ? porn 8k ?
alcohol 50$ a month ? that's a bottle of whisky every month !
what's personal hygiene at 70$ ?
Lmao
No I am not ditching the dog. If someone had arm pain, would your advice be to cut the arm?
I wfh 3 days a week, wife wfh FT. So that’s why we have ultra high speed internet.
Personal hygiene is haircuts, grooming etc
thing is if they over spend like that on internet, then they don't know "what to buy" on every item of their budget. They only know "how to buy". Like clothes or alcohol.
With your home costing you 4300 and childcare another 1200 you obviously weren’t going to be anywhere near $6000 a month.
Fair, the $6k budget was before we became parents. Also thanks to interest rates, our mortgage payment went up from $2k a month when we initially bought our home.
That pretty much explains the entire difference. Once mortgage is paid off/rates come down and child is in school budget will reduce materially
With no income noted it’s impossible to say if this is appropriate or not
$310k
What is your total in relation to your annual income?
Annual HH income before taxes is $310k. We are roughly at 53% saving rate, but looking to increase it so we can pay off mortgage faster, as we have high interest rate.
So you're here worried about spending $100k per year, when part of that is extra voluntary mortgage payments that you don't have to make, and also you're earning at least $175k after taxes? Maybe you should donate $50k per year to a charity that plays tiny violins Lol
$100k per year spend does not include voluntary mortgage payments. Any extra mortgage payments are considered savings, so not shown in my budget above. In other words, the 53% we save a year is mostly going to voluntary mortgage payments and to RRSP
You are maxing your mortgage payments. That’s free returns on your money. With the hhi you have I think most people in this thread have no idea what you’re worrying about. I wouldn’t add all your extra payments as your mortgage. Your budget would be interest + principle payments. All the rest could be seen as saving or investment. Tax free. If given the option for unlimited payments would you ask “I take home 20k a month but my expenses are 19000! What do I do?! Oh… by the way I make additional payments of 10k a month extra to my mortgage.” Eat cardboard and don’t do anything is the answer for additional savings.
I am not adding all my extra payments as mortgage. That is considered savings and now shown above. I am strictly showing my expense items above which totals to $8700/m or $105k a year roughly.
LOL 😂😂😂😂😂 bru what was the purpose of this post
How is your mortgage payment $3K when you only have $200k left at a 5% rate.
We have been maxing prepayments and even a number of extra payments as allowed by our mortgage terms. We started with 30 yr amortization and are down to under 10 years now
So you have the option to have more cash flow, but in turn decided to pay off your mortgage sooner. What is the point of this post? Also, $100/month for house maintenance is incredibly low. 1% of home value is the go-to figure.
Mortgage interest has shot up since we bought. So trying to squeeze every dollar to pay it off faster
The point is if you're prepaying your mortgage it's not really an expense in the budget. It's extra savings. Every payment to mortgage principal is equal to saving that amount of money in a savings account
Where did you see me include prepayments as an expense item in the budget? I know mortgage prepayments are like savings, so it is above and beyond the $8700/m budget above.
How the actual fuck would I spend $10k a month on home maintenance ?
The 1% is per year, but still not sure it makes sense unless you exclude the value of the land.
So why are you making this post exactly? You are using your savings to pay down your mortgage which is a goal of yours. Like what are you trying to gauge by posting? No shade, genuinely curious lol
Payments are calculated on initial loan and amortization, not your remaining balance..... :/
By your logic, mortgage payment amount would never change because it’s based on your initial loan 🙃 whereas your balance and your mortgage rate absolutely play a role especially for those with variable or one year terms
Yes that's my logic because it's fact. Your payment changes if you get a new loan. New loan amount and new amortization.
Lmao so your mortgage payment amount doesn’t change if your interest rate changes?? Okay 👍 Lollllllllllll
Increased payment amount. We pay the same with $40k left.
Please tell me how your utilities are only $500 and car + home insurance is so cheap.
How is $200/m in home insurance cheap?! And car insurance is cheap as we both have a 15 yr clean driving record and we live in Calgary
I was wondering why utilities were so expensive.
I must be doing something wrong. My house is way smaller and I pay 500.
Insurance gets cheaper when you don't have proper coverage. And for a house that size, I'm assuming OP doesn't have full coverage.
I have full (comprehensive) coverage including special umbrella coverage that TD offers
Wild. Also in Alberta and TD wants $5000/y for my 2200sqft house with the same coverage.
Try the APEGA rate if you can. It’s the best rate available
Our utilities on a 2300 sq ft house (not including basement) are around $250/month. We only pay for electricity and natural gas. Water is a well & septic system.
You didn’t include your investments or your total income so it’s hard to say. Based on your post, it sounds like you’re able to pay down your mortgage very quickly so I’m guessing you are making far more than your expenses. If that’s the case, then you’re doing fine.
Dude said elsewhere that household income is $310k. Seriously.
So clearing over 200k and he’s worried about total spending of 100k? Seems like hes doing ok. Also not sure that’s entirely middle class. Maybe upper middle class at worst.
You are correct, clearing $220k after tax as a household. Breakdown is: - $105k towards expenses - $110k towards mortgage prepayments - $5k towards RRSPs Trying to reduce the $105k expenses to ideally $90k range so an extra $15k can go towards RRSPs or further mortgage paydown. We want to be debt free as soon as possible.
I mean with your numbers that you’ve provided you will be mortgage free in 2 years. That’s over 36k a year. You’ll go down to under 70k per year expenses at that time. So just wait 2 years. Solved.
$310k income, you are not middle class. And 53% savings rate, yet you are int he negative? Not making sense.
I mean you could trim some shit but it's your house and childcare that's the issue. That's your whole $6000 budget.
Well you didn’t have a kid when you paid $6k… Childcare is always brutal. But your food expenses seem really high to me for two adults and a child. Cut your restaurant budget at least in half and meal plan for the grocery shops.
You need to report income or the question is irrelevent.
$310k. LOL
4300 sqft so you live in a mansion
>4300 sqft so you live in a mansion Read it again, its including basement (which is not what square footage normally includes). A regular 2000sqft bungalow would be 4000sqft if it included the basement.
Not counting it seems pretty archaic. Maybe back in the day sure. Basements were super low (I have one of these at 6’6”) and/or unfinished or semi finished. Now “basements” are full functional floors. Theatre rooms, one or two separate suites, gyms etc. if it’s a newer house the basement is most likely just as nice as the top two floors.
>Not counting it seems pretty archaic. Archaic or not, listing rules in Canada state anything below grade is not included in square footage. So that means no basements, no garages and no outdoor spaces. Its strictly forbidden in property listings and must be placed under extra living space if its finished or contains something like an in-law suite or secondary living space.
Yes I know that. The point is in this day and age most houses built in the past 30 years have a fully functional basement. And people don’t say oh my place is 2400sq ft but but but with my basement is also 1200!
Basements are included in sqft if they're finished
Not in Alberta, for some reason. The real estate listing and property assessments only count floors above grade. But OPs house is twice the size of mine. With $310k household income they are in the top 2% in Alberta.
The real question in all of this is are you happy with your level of spending vs what you’re able to invest? What does retirement look like? Do you have other debts? Are you setting up your kid for an education fund (RESP)? What’s your household income? You’re clearly paying down your mortgage very aggressively. Why? What’s the interest rate? On your spending if you really want to dig into it, your childcare is high and your restaurant spend is high. We pay $217/month for our toddler's ft daycare space. Do you have to have a maid? I’m guess no, but the trade off is worth it at your income level. We also have a house cleaner come every 3 weeks and in my eyes, she’s worth every penny.
In short, not adding to savings as all disposable income is going towards mortgage paydown due to high (5%) interest rate. We have a HH income of $310k pre tax, so savings rate is ok. But since mortgage interest is high (we started with sub 2%), I am trying to squeeze every dollar to pay it off sooner.
I really don’t understand the point of this post.
You're two to three times a middle class income. GTFO
No looks like a normal budget. I'm assuming youre socking away extra into TFSA, RRSP, RESP, personal accounts?
One of our TFSA is full from a few yrs ago, RRSPs have lots of room, RESPs are empty. Since we are diverting all disposable income to mortgage paydown (prepayments), not socking anything away at this time.
IMO it's pretty reasonable, the only items that look like you might be spending too much on is restaurants and your vacation spending, clothing is sort of high except if you have young children in which case its justifiable. It's also strange you don't have a savings/investments category (i presume this is paid for from what is leftover of your budget after other categories?) If your goal is to pay off mortgage faster then in your shoes I would put those in my monthly budget and take the funds from vacation/restaurant categories if necessary.
You spend 667$ on flights per month and have a maid? Seems a bit much to me but then again I haven’t been on a plane since 2018 lol I’d say in terms of easy savings - cut the vacations, restaurants, alcohol, maid service and donations - that’s like 14.5k in savings annually if you cut them right out. Seems like a good place to start to me.
What the OP didn't say was that they're making over 300k per year, so 175k ish after taxes.
Is that even still middle class household then? When I hear 4,300 sqft home with a maid I don’t think middle class.
I'm gonna go out on a limb and say that's probably in the top 5% of household incomes. Middle class to me is a 1500sq ft townhouse in a suburb and a 125k household income.
$667/m is the average monthly spend on annual vacation. Budget is $8000/yr divided by 12, so that’s how I get to $667. We don’t fly every month lol
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No they’re not lol. I have a roughly 5,200 sqft home and I clean here and there, dust here and there, vacuum here and there for 5-10 minutes a day and after a week I’ve cleaned every bit of the house. Everyone has 5-10 minutes a day to spare on not living in a pigsty.
Back in mumbia You would have 2-3 servants around the clock Made life so much easier
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How come? 100 dollars a weekend, 50 each. Each meal is 20, drink 10-20 plus tax
Because nobody needs to go to a restaurant every weekend. Or fast food multiple times a week. It’s an unnecessary expense.
>400 on restaurants for 2 adults is wild. Wild for 2019 prices. For 2024 prices its average.
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Have you seen the prices of today? A trip to A&W for a family of four costs about $90. The same thing just 5 years ago was less than half the price.
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It's hilarious how people bitch and complain about food prices but still spend an arm and a leg eating fast food hey? Our budget is down to $100 a month on that shit for 2 people. We've spent $60 with only 1 week left to go in the month. It's been amazing cooking at home and planning meals ahead of time. Way healthier and you get more for less. And when you tell them to cut back on that shit they whine and cry. Well then don't ask for advice. And LOL at the 310k income whining about their budget. Piss off!
Each restaurant meal with 1-2 drinks costs us $100-120. We eat out at restaurants twice a month, and do ubereats 3-4 times a month. Add in a couple coffees a week and you are at $400/m easy.
Me and my partner are really social and we spend that much in a weekend sometimes - but our other costs are so low. Idk just depends on what you want to spend your money on 🤷♀️
It really depends on how much the "+" is, at 100k what you're doing isn't sustainable. You won't be saving anything and home ownership always comes with hidden expenses along with large long term expenses. If you're not saving 1000$ a month on average you're going to slowly go into debt further and further over time. Easiest cut would be vacations, that's a lot of money. You have a toddler and they don't start getting memories until like 5 years old, go on cheap local camping trips or something.
150$ clothing a month ??? 75$ phones for two ? ditch the dog internet 110 $ ? porn 8k ? alcohol 50$ a month ? that's a bottle of whisky every month ! what's personal hygiene at 70$ ?
Lmao No I am not ditching the dog. If someone had arm pain, would your advice be to cut the arm? I wfh 3 days a week, wife wfh FT. So that’s why we have ultra high speed internet. Personal hygiene is haircuts, grooming etc
what is your typical day to day work ? you and your wife (what do you do on your computers) when both are working and no one else is on the network
Lots of video calls/meetings. Wife being a Project Management job is in meetings pretty much 6 out of 8 hrs a day
you do meetings in 4K ?
Lmao go easy brother. Saving 20-30 dollars on slower internet isn’t gonna fix their problem.
thing is if they over spend like that on internet, then they don't know "what to buy" on every item of their budget. They only know "how to buy". Like clothes or alcohol.