My new budget

[hannamaren]

All numbers are approximate 

take home (after tax)  $9000
mortgage.           $3000
fees.                     $400
elec.                     $100
cable/phone/
internet.               $160
gas car.                $100
gas house.           $100
food.                   $500
student loans.      $900
clothes, misc, gifts
                         $1000
eating out/other.            $500
Nanny.               $2000

I am kinda freaking out about the budget, but we can cut that $1500 of mostly misc, right? 
And I have rounded up on everything, I actually think our mortgage cost is closer to $2500

[Deleted]

I don't think I'd be freaking. How does this compare to your old budget? Just no more saving for a DP? Are you paying more than the minimum on your student loans? What do you currently spend on food? Are taxes included in mortgage?

[hannamaren]

Our current rent is $1500 so our housing costs are doubling.
Most of our downpayment savings happened before the baby, before the nanny cost.

We pay the minimum on our student loans because the interest is tax deductible. I only owe $750. But my payment is $125ish.

[mollybrown]

I'd start by collecting your actual expenses. Is your mortgage $2500 or $3000? $500 is a huge difference. Either way, it doesn't seem freak worthy. There is plenty you could cut or reduce.

[hannamaren]

The mortgage is $595k at 2.05% and I rolled the tax into that number.
$400 is community/HOA fees that include water.

I made guesses for the rest based on my not so energy efficient much smaller apt.

I just needed someone to say this is normal. We have always had a huge cushion.

[hannamaren]

Our mortgages work differently in Canada. You can lock in for max of 5yrs. Ours is 2yrs. Risky, but the rate is super low, so we are taking the risk.

[Deleted]

Jenny - Hanna can answer this better than I can, but I think mortgages in Canada are only good for 5 years - refinancing periodically is the norm. I do think 30 year amortization is still possible.

OP i agree with Jenny that you do want to be careful about basing a long term budget on such a low interest rate that's not guaranteed. I would also nail down exactly what your housing costs are. Your mortgage broker can give you the exact number.

I'm amazed your nanny is so cheap. Ours is double.

ETA: 2 yrs would make me really nervous. What's the amortization - 30 yrs? What's the rate for a 5 year term?

[kwynn]

$100 on electric seems low---mine's $70 and I live in a one bedroom apartment.

[hannamaren]

Our retirement is behind, but I do have some money taken out from work. That will be our priority once we get settled into the new budget.
And 2 yr vs 5 yr, the rate would have to go up to around 4.0 for the following 3 yrs for us to lose. Right now, the government is keeping interest rates low to keep house prices in the range they are in to avoid a bubble bursting like back in the 80s. I hope that is true for 2 more years. It is a risk, but we are going to ride the risk.
Sometimes I think we should just keep renting.

[gogreengowhite]

I realize there is a lot of fluff, but what about savings? House fixes, cars, college, vacations?

We have almost identical income and daycare costs and this budget wool make me nervous.

Sorry for being the downer.

[aspentosh]

I think you need to nail down what housing costs would be. There is a big difference between $2500 and $3000.

What about savings for repairs? Does this leave room in your budget to increase your retirement (since you said you were behind)? What is in "misc"?

I don't know why but I just feel like a lot is missing and this is very vague so I can't give a true response.

[changedname]

Hanna, I think you might be overestimating some costs -

I live in a 1800 sq ft house and pay $65 a month for Union Gas and about $170 every 2 months for hydro. My cable/internet/landline is $106 a month. (I know you would have different providers but you should be around the same price?)

Does you new house need any work done? It might also be worth doing one of those energy audits if it's an old house - the gov. give you tax credits and rebates.

[Deleted]

I don't like your allocations at all. You need more categories (RETIREMENT) and I'm sure you can break down stuff under "misc."

[awick14]

Feb 7, 2013 21:35:05 GMT -5 BirdGirl said:

Jenny - Hanna can answer this better than I can, but I think mortgages in Canada are only good for 5 years - refinancing periodically is the norm. I do think 30 year amortization is still possible.

OP i agree with Jenny that you do want to be careful about basing a long term budget on such a low interest rate that's not guaranteed. I would also nail down exactly what your housing costs are. Your mortgage broker can give you the exact number.

I'm amazed your nanny is so cheap. Ours is double.

ETA: 2 yrs would make me really nervous. What's the amortization - 30 yrs? What's the rate for a 5 year term?

(I also live in Canada, in BC though)

In July (I believe) of 2012 they changed the mortgage laws in Canada. They made it so that the amortization can now only be 25 yrs.

OP- when we got our mortgage we were able to sign at 3.21% for a 5 year. It was slightly cheaper (2.90%) for a 2 year but we didn't want to take that risk. We liked the 5 year plan. What would your 5 yr rate be?

I would use your "fluff" to get your retirement up to the 10%.

[Bob Loblaw]

Will your incomes continue to increase? I think I'm far less conservative than most on this board re: housing costs. Our mortgage payment was probably way too high when we first bought, but within a few years we were more than comfortable.