# Younger couple creating a financial plan...



## KLR650 (Sep 12, 2010)

I am starting to write out a monthly budget & financial plan but thought I'd post our situation here first for any advice. Here goes:

We are late 20s, getting married this year, no kids yet.

Income: 160,000 last year, evenly split, work long hours/shifts/on call 

Savings: 98,000 combined

TFSAs: 30,500 combined--cash/fixed income

RRSPs: 62,700 (mine)--diversified equity index funds & blue chips
5,616 (hers)

Non-Reg: 20,000--shares in company I work for (I know this isn't recommended by many professionals but the company contributes a portion which I can't pass up)

Pensions: 42,000 dc (mine)
hers is db with total contributions being 27,000 to date (unsure of generally accepted way to value this for a net worth statement)

House is worth at least 195,000 with a mortgage of 175,000 @ 3.95% till 2014--currently paying ~$1600/month.

NW is just over $300k.

We are currently saving at least $3000/month:

-$550 to RRSPs
-$1500 into a savings account for our wedding--will have no debt from wedding--this will go toward vehicle/house when wedding is over
-$950 into emergency/general savings


Our financial goals/liabilities within the next 5 yrs:
-2 children
-life insurance
-larger vehicle for family (will probably spend 15-20k)
-build/buy a different house (~300-350k, will contribute much of our savings to this)

I think we're doing fairly well now but are very aware of how our short term goals will impact our finances. We will be earning less and spending more, that's why we're saving as much as we can now. I think it makes sense to maintain our ratio of contributions to mortgage/RRSPs...mortgage rates will only go higher from here and I look at double/lump sum mortgage payments as a sort of guaranteed rate of return on our money. 

Any thoughts/tips are very much appreciated, especially in regards to life insurance and the cost of day care.


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## the-royal-mail (Dec 11, 2009)

Wow. $98K in savings?? What does this consist of? Cash in a plain account?

I would suggest dropping the RRSP contribs for a while and putting the money into the mortgage instead.

I would normally suggest a tiered savings plan but you have $98K in savings. That is impressive. You could tier off $30K of that and put the other chunk down on the mortgage. Save yourself in interest costs!

Good luck,


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## KLR650 (Sep 12, 2010)

Thanks RM. The majority of savings are in high interest savings accts. I have thought of putting much of it towards the mortgage however I want to keep cash for greater flexibility when we look at buying our next place. We are considering buying land and building a house and I think it would be much easier/less stressful to not have to worry about selling our current house first. We would have greater bargaining power/options to be able to buy land without the condition of selling our house. Does that make sense?


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## GeniusBoy27 (Jun 11, 2010)

First off. You guys are doing great. It makes absolute sense to hold the cash, if that's what you're planning to do.

I think, in general, term life insurance is the way to go, and I would have enough to cover any significant liabilities. (i.e. mortgage and some degree of protection for the other spouse/kids, if that should occur)


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