# 28 & Divorcing - Time to Plan



## motl

I'm 28 with an annual gross income of 45,000 (+bonuses) and I'm currently going through a divorce. Throughout my marriage my wife was never that interested in a strict budget or financial plan, mostly because we made close to $110k combined and she was happy to enjoy our 20s. Now that I'll be on my own with considerably less disposable income, I want to finally begin carefully planning my finances and goals. 

Monthly Net Income: $2800
Savings: $3000 TFSA
Cash: $10,000
Liabilities: $0

Expenses
Cell: $60
Food: $200
Rent: ?
Transportation: $100-170
Other: $150
Fun: $100

The above is my expected situation in a few months. Right now I am living in our home until we can sell it. Assuming we only sell it for what we paid (should be higher), we stand to earn about $40,000 in cash after the mortgage is paid off. We plan to spend $19,000 to pay off my student loan and then split the remainder ($10,000 each). Any money in our bank account when we finalize everything will be split 60/40 in her favour. I don't know how much extra cash this will amount to.

Right now I'm debating a few things:

1. Transportation. With that $10,000 I could spend a few thousand on a car, paid in cash, which would be nice because we currently don't own a car. The added convenience would be the big sell here, but honestly I'm not sure it's worth it. My bus pass is currently $100/m while the car insurance would be over $150/m, plus gas. Although it would be nice to have a car for work (I'm an insurance agent), I live in a city with a very accessible public transportation system. 

2. Rent. I've never lived in a small apartment before, nor have I ever lived alone. My friends and family keep telling me to spend my expected lump sum on buying a cheap (ie. 200k) condo, since they are quite nice. Problem is, the mortgage and fees would probably total $1100-1300, which would be a large chunk of my income. I have a dog so I'm a bit unsure about finding a place with another person, but I could conceivably get rent down to $600-850 either shared or not. What is the max I should set for rent + utilities?

3. $10k. If I don't buy a car (or if I do), what should I do with the $10,000? I'm already planning on using $600-900 on a vacation in April to blow off some steam, but the rest of it will be for savings and investments. Should I just dump a chunk into TFSA and open a regular savings account for an emergency cash fund?

I'd like to begin saving $700-800/month. Using my current calculations, I should be able to swing that even with expensive rent. With a moderate rent, I could probably save $1000 each month. Given that I'll start with let's say $8000 - $12,000 I'd like to set a goal of $15,000 savings/investments by the end of the year (probably won't be on my own until the summer).

Would love to get some advice regarding my situation and how to move forward.


----------



## richard

It's probably best for you to stay flexible. Owning a condo is not flexible and it may put you somewhere that requires more driving. If you have the discipline to save and invest as much as possible you can put yourself in a much better position by keeping your monthly expenses as low as possible for a while. Opening an investment account and putting in whatever amount you can afford to have locked up for a long time, even if it's small, will help. If you're not sure keep a little extra cash. You can always invest it later. You could also set up some credit lines to be safe in case you run out of cash for some reason.


----------



## Four Pillars

Just rent for a while until the smoke clears. You can buy a condo later.

The fact that you have never lived in a small apt or alone, does not mean you can't do it.


----------



## Synergy

I'd also rent for a while - no point in rushing into anything IMO. I have no idea what the going rate for rent would be for your region. Perhaps you could talk to a local Realtor in your city. They will be able to give you a good idea with regards to the total costs associated with renting - base rent, utilities, etc.

Personally I'd also hold off on a car purchase for a while.

I'd definitely open up a TFSA and park your money in a HISA until you get things sorted out. It's going to be pretty hard to gauge your expenses until you're actually living on your own.

1+ for going on a vacation - enjoy!

Just curious, why is your joint bank account split 60/40?


----------



## PoolAndRapid

..


----------



## Synergy

PoolAndRapid said:


> My guess would be because the former spouse grossed 65k while the poster grossed 45k; a 60/40 contribution to the family gross income


Anything that is accumulated after marriage (assets, debt, etc.) is typically split 50/50.


----------



## carverman

motl said:


> Now that I'll be on my own with considerably less disposable income, I want to finally begin carefully planning my finances and goals.


I feel for you. I got divorced after 22.5 years of marriage because of the wife not caring about our finances, and draining the bank accounts towards the end..which was the final straw
for me. 



> Would love to get some advice regarding my situation and how to move forward.


You didn't mention how long you were married, if there are any children and if your ex-wife has a steady job to support herself. 
If it was a traditional marriage..(no prenupt) or legal agreement on financial matters and you are going through a amicable divorce, with no future financial liabilities from the divorce, 
then you can certainly plan ahead at age 28. 

However, if you have lawyers involved that turn you into adversaries, then save your financial resources, until you get the marriage discharge certificate from the court.
You just never know what lies ahead until it's all settled. Take this advice from someone that went through the legal wringer in Canada's divorce system.


----------



## motl

Sorry I should have been more clear.

We were together 13 years but married for 3.5 with no kids.

Our split isn't confrontational and so far we are working out fair, amicable divisions of assets and finances without involving lawyers. 

The 60/40 split was because she earns more and the original plan was to keep using the joint account until we officially split. On my recommendation, we have changed our approach. Instead we will each be opening our own personal accounts and dividing expenses starting now, and each depositing money monthly into the joint to cover joint expenses (~$1000/month each). This means I can start budgeting and saving immediately, which I prefer. 

So until we sell the house I will have about $1000 in joint expenses, which covers almost all of my typical monthly spending except bus pass and food. 

I have 3000 going into a TFSA and then I'll have 1000-1500 in cash in my chequing. I have a 1500 bonus coming in about a month. I planned on using about half for a vacation, but might use more so I'm just mentally writing off the bonus. 

Going forward I'd like to start saving as much as possible, especially before the house is sold. Seems my best bet would be a HISA and then move some junto TFSA later?

I think I agree about the car and condo. I can always rent condo with a roommate if I really want to. In response to the post about rental cost - I've found some nice 1 bedrooms for around 750-900 (utilities included) which is about as cheap as I can find without roommates. With a roommate I could get a house or condo for around the same price, or get an apartment for 550-700.

Until we sell our house I live a 5 minute bus ride to work so a car is certainly not a priority. I'd really like to have a car for convenience and hobbies (ie. take dog to lakes or hiking) but the extra monthly cost would be around $100, not including cost to purchase and maintenance.

Still trying to sort through everything... So much changing at once lol, but thanks. More input welcome.


----------



## kcowan

If living alone is a concern, look in the want ads for apartments to share. Just remember to mention your dog. Depending on where it is, avoid the burden of a car. The nice thing about sharing is that you get to interview the prospective apartment mate. And if it does not work out, you can leave.


----------



## Spudd

I would not get either a car or a condo. Like you mentioned, the car will vastly increase your transportation costs (price of the car itself, insurance, gas, maintenance) and you're doing fine now without one. The condo will tie you down, and I think it's important while you're in this state of flux/stress that you not jump into any new commitments. A 1-year lease is enough commitment. 

With the chunk of money you expect to have, I would just dump it all in TFSA. You can allocate part of it to a high-interest savings account for your emergency fund and the rest in investments. 10k is not a huge sum - you may wish to keep the entire thing as an emergency fund.

You can already start browsing rentals to get an idea for your budget. Craigslist.ca, Kijiji.ca, padmapper.com, and realtor.ca are the main sources I used when I was looking recently. Craigslist and Kijiji will have ads for people who want roommates so you'll be able to compare the cost of living with a roommate vs living alone.


----------



## RBull

Put me down as another that favours renting, no car. Stay flexible and cheap for a while as you get comfortable and re established by yourself etc. Your single status may change at some point and being flexible would be a real plus. Being a room mate with someone might have relatively low risk and certainly be cost effective so could be worth looking into. 

You've got the right idea with saving money and I would keep it quite liquid in a TFSA for emergency and possibly invest remainder for future savings.


----------



## Justin1980

I'd absolutely wait on the car idea. You had mentioned "_Transportation. With that $10,000 I could spend a few thousand on a car, paid in cash..._" Im sure you know this ($2,000 - $3,000) is no where close to enough money to purchase a new car outright? Check out autotrader.ca for ideas on used cars and the prices you can expect to pay when the time comes. But knowing that you'd be buying a 10-15 year old car, it's important to accept that even the best maintained vehicle is going to have issues, and I can only imagine how upsetting it would be to spend a large chuck of your lump sum on a car that ends up sucking the rest of your money in repairs over the next couple years. The last thing you want to deal with is additional unexpected bills while already dealing with all that will come with a divorce. Best of luck brother. My prayers are certainly with you. 
Justin


----------



## motl

Thanks for advice everyone. I'm trying to do this in steps, since I won't have the lump sum for a few months. Aside from planning the vaca, one of my first goals is to set up new bank accounts and cards.

I have 3000 in the bank right now waiting to go into a TFSA. I planned on putting it with ING and also getting a a chequing and HISA there. Good choice?

For credit cards I want to go no fee. Right now I have a BMO 0.5 cash back card linked to our BMO chequing Nd mortgage. I want to close all BMO accounts once everything is finalized. In December we also got a Captial One Travel World cArd. This is a great card but it's a joint Account so I imagine we will close the card, and my income isn't high enough to meet the 60k requirement anyway. It's in my wife's name and I'm an authorized user.

So here is what I'm looking at for credit cards. I'm thinking about getting an Amazon Visa, since it is 1% cash back (same as most other good no fee cards) on everything. It'd also be good for traveling and I make a lot of online purchases from US. I thought I'd also get an MBNA Smart Cash card. I'd use this card exclusively if there wasn't the 1250 cap, but I figure these two would be a good combo since I'd use MBNA for 2% on groceries and everything else on Amazon card.

What do you guys think of these choices? Are there better bank Or card choices for my situation?

If I do my plan above, would it be a poor decision to open both cards together and essentially have 4 cards open? As a note, I hAve very good credit and want to keep it that way.


----------



## richard

A no-fee cash back card is good since you probably don't want to spend enough right now to earn the rewards on the higher fee cards. I just opened a bunch of cards and probably have 4 more than I need at the moment. The impact on your credit score will be minor and temporary. But do keep your oldest card open if you can (if you've had it for more than a couple of years). That's account I won't close even though I don't use it for years at a time.


----------



## motl

Alright. I'm debating if its worth getting the MBNA just for groceries or if I should just get a 1% and use it for everything.

Haven't much knowledge of how credit cards impact credit... How long would I need to have new card before I could close my BMO one (I've had it 3.5 years)?

Also, if we close the Capital One (or remove me as a user) after having it a fe months, what kind of impact does that have?


----------



## Justin1980

motl said:


> Alright. I'm debating if its worth getting the MBNA just for groceries or if I should just get a 1% and use it for everything.
> 
> Haven't much knowledge of how credit cards impact credit... How long would I need to have new card before I could close my BMO one (I've had it 3.5 years)?
> 
> Also, if we close the Capital One (or remove me as a user) after having it a fe months, what kind of impact does that have?


The difference of 1% between the cards, and a $200 monthly grocery allowance make for a potential $2/month gain. To put that in context, it'd take over 41 years of accumulating that cash to finance the vacation you've already planned alone. My point? Is the $2 worth even the trouble of paying a second bill each month?


----------



## motl

Hm, that's true. I guess I didn't actually do the math. And even if I max out the MBNA for groceries ($400?), it's still not a big difference. 

However, the MBNA has extended warranty while the Amazon card doesn't. I'm debating between the Amazon card + MBNA or just getting the Capital One Aspire cash back card. Capital One includes great warranty features and same cash back as Amazon, but charges for foreign transactions. I buy a lot of my clothing and electronics from the US, and I see myself travelling more in the future, so I like what the Amazon card offers in that regard. I've heard a lot of bad things about Chase in Canada though, so I'm not sure.


----------



## richard

If the BMO card has no fee, it could give your credit score a small boost for a long time by keeping it open. When you've had another card for 10-15 years then it probably won't make as much of a difference.


----------



## motl

Would it be worthwhile to lower the limit on the BMO if I don't plan on using it any more?


----------



## marina628

I would go to BMO and get them to sort our separate credit cards ,credit lines etc for you guys.You obviously have a relationship there since they gave you a mortgage .Then with phase two after you sell the house you can look at other options.I know my niece and her husband found dealing with the bank holding their debt was the best route for them.II would rent a 1 bedroom condo ,something easy for you to maintain where you can lock the door and go out and enjoy life for a while.


----------



## motl

Ya, we already have individual BMO Mastercards, but like I said the rewards are awful so I don't plan to use mine. 

Our only joint is the Capital One, but I'm just an authorized user so I am going to call to get myself removed from that. Then I will open my own credit card(s) for regular use. I'm just waiting for cheques from BMO ($36 for 50!!!) to complete the process to open Thrive and TFSA with ING. Now that we are splitting finances starting this month, I have a bit of a budget to work out:

Net Income: $2800 base (more with bonuses, but they're rare right now)

Half of Joint Expenses: $1000 (includes mortgage, insurance, utilities, and my student loan payment)
TV/Internet/Cell: $200
Food: $200
Dog: $~80
Bus: $100
Fun: $100

Savings: $700 (to go to hISA/TFSA)
Travel Fund: $100

I plan to cancel my TV service which will reduce my monthly cost, and I may switch cell providers to bring internet + cell under $100/month. Dog number is a guess since his food costs about $80 every 1.5 months but I also like to spoil him with treats from time to time. This plan should let me get to my goal of $15k net worth by the end of 2014. I'm hoping once I move out I can reduce my rent/utilities payments by $100-200 which, combined with internet + cell savings, would give me closer to $1000 for savings each month.

Any comments so far?


----------



## Spudd

Don't forget veterinary for the dog. It can be expensive!

Also, medical/dental for yourself. Even if you have insurance through work, you usually don't get 100% covered. 

When you move out, will you need to buy any furniture/dishes/pots/etc? 

Overall I think your plan looks good, but I suspect you may find your expenses are a little higher than you plan. I'd recommend you get an account on Mint.com and start tracking your expenses. It's a good way to figure out where you are doing well and where you're not.


----------



## motl

Hmm, good tip. 

I'm sure my plan will change as this is a very rough estimation based on goals. My actual expenses may be a bit different once I move out. 

When I move I may need to buy some furniture. My wife is probably going to live at her parent's for a little while, so I don't think she'll take much of the day-to-day stuff (ie. kitchen utensils, pots, etc.). I think we'd discussed splitting the furniture (ie. she gets bed and I get dining room table, she gets den chairs and I get sofa, etc.). We haven't worked out the specifics on this yet though. Hopefully I don't need to invest in many big things. We actually have an extra sofa + chair in the basement, and I can buy tables at IKEA for cheap. Only potential expensive purchase would be a bed. If I need to buy that, it will come out of my lump sum.



Spudd said:


> Don't forget veterinary for the dog. It can be expensive!
> 
> Also, medical/dental for yourself. Even if you have insurance through work, you usually don't get 100% covered.
> 
> When you move out, will you need to buy any furniture/dishes/pots/etc?
> 
> Overall I think your plan looks good, but I suspect you may find your expenses are a little higher than you plan. I'd recommend you get an account on Mint.com and start tracking your expenses. It's a good way to figure out where you are doing well and where you're not.


----------



## motl

Doing bank accounts and credit cards this week. Plan is:

Amazon Visa (for US purchases and travel)
Capital One Aspire Cash (for everything else) - like MBNA but don't plan to buy enough groceries and gas to be worth giving up features of Capital One

For chequing, HISA and TFSA I was looking at ING but they also just lowered rates. I've heard good things about Canadian Direct Financial but I don't know that brand we'll. what do you guys think? 

I don't necessarily need all of those accounts with the same bank, although it would add convenience. Thoughts?

Meeting with real estate agent this week which should give me a clearer idea of how much lump sum I can expect to see. Going To begin fully tracking my spending and savings in April since it will be our first fill month with divided finances.


----------



## Westerncanada

Now I may be out of line in suggesting this.. but I have to ask, can you literally eat off of $200 per month?


----------



## RBull

^Fair question. 

My wife and I spent $442 avg/mth for the previous year. We eat almost all meals at home or brown bag it. We also eat very well and that amount includes all sundries. However my wife is also a pretty smart shopper. If the OP is too he is probably not too far off.


----------



## motl

It's a rough guess. I will adjust it based on reality once I have a full month or two of individual spending under my belt. Right now I have a friend staying with me and we're alternating on many of the 'essentials' like milk, eggs, etc. so my food costs are down a bit right now. To specify, the $200 would not include takeout as anything like that would fall into the 'fun' category. As it stands, I generally buy food once per week and rarely spend more than $50. Like I said, I will see how it goes once I'm completely alone and have a month or two of real purchases to track.

My BMO cheques should arrive today so I'll be able to finalize my new accounts at ING. I'm still debating if I should use something like CDF instead, but perhaps I'll just stick with ING for now since I won't be depositing a very substantial sum of money? Was kind of irked to see ING rates drop the other day so wasn't sure if I should consider somewhere else for HISA/TFSA. I think I'll stick with ING for chequing either way.

My wife cancelled our Capital One so I don't have to worry about that one. Opening Capital One and Amazon Visa today I believe, so I can retire my BMO card.


----------



## Taraz

Westerncanada said:


> Now I may be out of line in suggesting this.. but I have to ask, can you literally eat off of $200 per month?


If you don't eat out and you do your own cooking, that's totally feasible.


----------



## Harp

Four Pillars said:


> Just rent for a while until the smoke clears. You can buy a condo later.
> 
> The fact that you have never lived in a small apt or alone, does not mean you can't do it.


Went through this exact same thing back in 2005. I owned since 21 and hated the idea of having to rent. Looking back, I still think I did the right thing by renting for a year until I got my life change in order.

Divorce can be tough to go through emotionally. 

I got myself a small one bedroom rental 5 mins from work - I knew I would never stay there long and rent was cheap but things worked out.

I eventually got back into home ownership, etc.

Baby steps my friend.


----------



## motl

A lot has happened since I started this thread. I'd been doing a good job of saving for a few months and decided to go on a much needed vacation in April. I didn't break the bank, but I spent some money from my savings. Perhaps not the smartest use of my money, but it was something I'm glad I did and now that's out of my system I can continue onward. Here's where I stand:

TSFA: $4000 - I have a bonus coming at the end of the month and hope to bump this up to $5000.

*Expenses*
Joint: $1200
Cell: $80
Dog: $100
Transportation: $100
Misc.: $50

I know the above doesn't include food or entertainment. I've recently changed my eating habits so I'm still working out how that will impact my budget (for better or worse). The above leaves about $1200 per month, and I think it's reasonable to expect I could save at least $700 of it (25% of net income).

*Plans*
1. My joint expenses cover mortgage, home insurance, utilities and cable/internet. Once the house sells I expect this number should decrease from $1200 to about $1000.

2. I will probably be cancelling my cell phone and moving to WIND once the house sells (will be cancelling all Bell services at that time). I should break even on the cell cancellation fee after about 10 months at WIND and save about $560 over the next 2 years versus finishing the Bell contract (due July 2016).

3. I think I am going to buy a car very soon. I will be paying cash and not more than $5000 all-in. I plan to use my savings to pay for this since our house still hasn't sold. My monthly expenses will likely increase by about $100 (compared to bus pass) due to gas and insurance. Right now I live close enough to easily commute to work by bus, but I don't plan to live in this area after house sells. I also haven't owned a car in a very long time and I'd like the convenience (as a dog owner, as an example). 

4. We ended up listing the house for more than I originally expected. We've decreased once since listing and have had some interest. I originally expected to get about $10,000 from the sale but that number could be closer to $15,000 or $20,000. Proceeds from the sale will be split between an emergency fund and savings to be invested.

Any thoughts?


----------



## NorthKC

There's a lot of stuff happening right now and since you can commute to work by bus, I'd suggest holding off on the car purchase until the house is sold and you will have a better idea of where you live. You can then use some of the proceeds from the sale of the house to buy the car.


----------



## motl

That was my initial plan. Here are my thoughts that swayed me to buying sooner:

1. Even with more funds available, I don't want to spend more than $5000ish on a car. As tempted as I am by all the 0% financing offers, I just don't want to add another monthly bill and I'd rather keep most of the house proceeds for savings/investments.

2. More importantly, the practicality of a car is calling me. I was happy for years and years without a car, but changes in my life really make me realize how annoying relying on public transportation can be. Dating without a vehicle, for example, is no fun. Additionally, this is my first summer with my dog and I really wanted to get him out hiking, swimming, etc. at nearby lakes and cottages. Arranging this can be challenging without a vehicle of my own. At this point a closing date for the house will almost certainly come near the end of the summer (at the earliest). I'd rather not miss out on the whole summer.

I know that isn't necessarily a practical argument, but it's what's motivating me right now. I've been 'that guy' without a car for as long as I can remember. A car isn't an ego thing, but I feel like (at 28, almost 29) I've reached my limit of tolerance for being without a vehicle 

Want to decide by the end of the month though.


----------



## lightcycle

I've done public transit after having a car for a very long time and IMO you can't go back.

I think if you can afford a cheap car that doesn't generate too many additional expenses, then the benefits in convenience, time, avoiding frustration and general uptick in your quality of life is well worth the cost.


----------



## Mortgage u/w

I think you should go ahead and get the car. By your posts, I think you are set on getting it. If the convenience is what you need, then go for it. I would definately consider a Honda or Toyota hovering the $5k mark - reliable, low maintenance and cheap on gas.

As for the rest, take you time, settle down and once you're finances are in place, start planning for your future by maximizing your savings.

I would not recommend buying a condo.....in today's market, its much cheaper to rent when compared to condo expenses. An alternative would be to buy and live in a 2 or 3 unit house.....you will have rental income to help pay your expenses while you build equity.

Good luck to you!


----------



## motl

Thanks guys.

Yup, I'd already decided against the condo idea. My parents thought I should considering there are condos 30min from the city selling for under 100k, but I wasn't really sold on the idea. I'm pretty tired of maintaining a bigger home haha. 

The condo market in Ottawa is so saturated that I'm sure those options will still exist in a year or two if I choose to reevaluate at the time. For now I'm looking to find a simple 1 bedroom apartment and see how the year goes.


----------



## Justin1980

Im actually in ottawa myself as well.
The couple things i'd advise considering regarding a car are the following:
- You've allocated $100 per month for insurance and gas. You said you haven't had a car in a long time, which probably means you haven't had insurance. Or if you had, you were likely a secondary driver on your wifes policy, which would have made your insurance like half of what it will be now. $100 for gas and insurance seems like you won't have many litres to play with. I don't know any men in their 20's with insurance alone under $100 monthly without tickets etc.
- Did a quick check on autotrader. Toyotas under $5,000. You'll be hard pressed finding many with under 2 or 300,000kms that aren't at LEAST 10 years old. It would be wise to assume a large chunk of money may be needed for repairs somewhat frequently on even the best maintained vehicles of that age and mileage.


----------



## Four Pillars

I would get the car, but like Justin1980 said - it will cost a hell of a lot more than $100 per month to run.


----------



## motl

Thanks Justin.

To your first point, I meant that gas + insurance would increase my expenses by $100 over current, which includes a $100 bus pass I will no longer pay for. I was estimating about $200/m for gas + insurance. This will obviously depend on where I move, but until moving I will keep living 5 minutes from work (and walking sometimes during summer).

To your second, I've had similar issues. I've found a few Civics 2003-2005 with 150-170k in the price range. I've also been recommended the early-mid 2000 Elantras. I have one saved that is a 2006 Elantra VE with 130k for $4000. Trying to be smart about the car if I buy one, because I'd like it to last a few years.


----------



## Justin1980

Oh ok, my mistake in regards to the $100 monthly, lol. $200 is certainly more do-able.

Sounds like a good deal on the elantra, good for you. My last vehicle was a 2006 escalade with only 80,000 km. And wouldn't you know it, my first trip down to toronto, i blew something tranny related (i forget exactly what it was now) and the repairs were a couple grand. On top of that was a huge bill to have it towed about 200km from where it broke down on some "special" (ie expensive) flatbed tow truck that had to be used. Just reminiscing on how expensive the unforeseen repairs can be. May 2013, i drove to hamilton for my grandfathers funeral, and someone stole it out of the hotel parking lot. I've been vehicle-less since then (for the last year), and i've been looking into those electronic bikes! Haha, from escalade to e-bike! But the savings have been great and i've been investing all the monthly savings.

I certainly hear you on the dating thing though, that would be rough. You'll figure it out though, keep us updated brother.


----------



## KaeJS

motl said:


> A lot has happened since I started this thread. I'd been doing a good job of saving for a few months and decided to go on a much needed vacation in April. I didn't break the bank, but I spent some money from my savings. Perhaps not the smartest use of my money, but it was something I'm glad I did and now that's out of my system I can continue onward. Here's where I stand:
> 
> Any thoughts?


You are going through a divorce.

You are allowed to go on vacation, my friend. Go twice, if you have to. Sometimes it isn't always about the money. 

As for some "advice", I would wait on the car until the cold weather comes. Right now, it's a lot easier to get around without a car because the weather is nice. Not only that, but prices of cars are generally higher in the summer.

You can probably get a better deal on a car in, say, November, than you could get right now in June. Also, this gives you more time to save money to get the car.


----------



## carverman

motl said:


> Hm, that's true. I guess I didn't actually do the math. And even if I max out the MBNA for groceries ($400?), it's still not a big difference.
> 
> *However, the MBNA has extended warranty while the Amazon card doesn't*. I'm debating between the Amazon card + MBNA or just getting the Capital One Aspire cash back card. Capital One includes great warranty features and same cash back as Amazon, but charges for foreign transactions. I buy a lot of my clothing and electronics from the US, and I see myself travelling more in the future, so I like what the Amazon card offers in that regard. I've heard a lot of bad things about Chase in Canada though, so I'm not sure.


Sometimes those extended warranties MAY BE hard to collect on..when in doubt read the fine print. You will probably see lots of exclusions.



> You'll also have to supply a hefty volume of documentation, including your original receipt, the relevant credit card statement and a copy of the manufacturer's warranty. Your card won't cover any kind of damage that your original warranty didn't, and it'll pile on a few of its own exclusions as well, including, for the most part, normal wear and tear, power surges, accidental damage and catastrophes like floods.
> 
> If your broken item does qualify for extended warranty coverage, your credit card company will decide whether to repair it, replace it or reimburse you for it. You may be asked to mail in your damaged item and forced to survive without it for weeks.




Read more: http://www.creditcards.com/credit-card-news/compare-extended_warranties-1273.php#ixzz34qsHq3tI


----------



## carverman

Westerncanada said:


> Now I may be out of line in suggesting this.. but I have to ask, can you literally eat off of $200 per month?


Yes, but not shopping at a major supermarket like Loblaws..they are very expensive these days. You would have to be more selective in your grocery shopping and use Food Basics,
or Freshco (if these discount NO FRILLS stores are available where you are, and I'm sure they are but under a different name of course.

Kraft Dinner can be prepared in many ways, so can rice veggie dishes that you cook yourself from scratch. ..as the BareNaked Ladies song goes..


> If I Had $1000000
> We wouldn't have to walk to the store
> If I Had $1000000
> We'd take a limousine 'cause it costs more
> If I Had $1000000
> *We wouldn't have to eat Kraft Dinner*.
> 
> (*But we would eat Kraft Dinner. Of course we would, we'd just eat more.:biggrin:
> And buy really expensive ketchup with it.*
> That's right, all the fanciest Dijon Ketchup. Mmmmmm.)


----------



## KaeJS

Mmmmmmm.... KD

KD and Mr. Noodles are my staples. LOL. Good way to save money, but I try to eat only one of these two once a week. Not very nutritious.

I can't remember who it was, but years ago someone on CMF, (Maybe Carver, or Mr. Snow?) made me a picture of a gravestone with my name on it.

The writing on the gravestone was something along the lines of:

"I owe my life to Mr. Noodles
Life was short, but I saved oodles."


----------



## KaeJS

Found it!

It was zylon! :biggrin:


----------



## carverman

KaeJS said:


> Mmmmmmm.... KD
> 
> KD and Mr. Noodles are my staples. LOL. Good way to save money, but I try to eat only one of these two once a week. Not very nutritious.
> 
> I can't remember who it was, but* years ago someone on CMF, (Maybe Carver, or Mr. Snow?) made me a picture of a gravestone with my name on it.*
> 
> The writing on the gravestone was something along the lines of:
> 
> "I owe my life to Mr. Noodles
> Life was short, but I saved oodles."


Like the gravestone inscription. each:
Well it wasn't me..but really Kaejs..you HAVE to include your veggies with it. I include chunks of broccoli or green pepper, or cauliflower...small frozen shrimp sometimes to add some "seafood" flavour too.
but..If I had a million dollars, unlike the BNL song..I would not eat Kraft Dinner or Green eggs with ham for that matter.:biggrin:


----------



## Pluto

Did you consider getting a mortgage and buying her half of the house, then getting tenants/roommates to cover the mortgage? Don't know it it is a good idea or not, practical or not, but it is something to consider. Could be an opportunity to be sole owner paid for by tenants. There might be enough rental income to cover all your housing expenses. You might be able to assume the mortgage you already have.


----------



## motl

Pluto said:


> Did you consider getting a mortgage and buying her half of the house, then getting tenants/roommates to cover the mortgage? Don't know it it is a good idea or not, practical or not, but it is something to consider. Could be an opportunity to be sole owner paid for by tenants. There might be enough rental income to cover all your housing expenses. You might be able to assume the mortgage you already have.


I did consider this, but I'm not sure it's worth it. I admit I honestly don't know enough about the financial aspects of creating a profitable rental scenario out of my situation. Here are some numbers:

Mortgage as of June 1: $223,000
Monthly Payment: $1600 (includes insurance and property tax)

Her expected profit from selling the house is $10-20k, although she really wants closer to $20k. I imagine I would attempt to assume the mortgage solo (not sure my income level would allow for that) and add on $20k to buy her out. For sake of argument, I'd be up for $250,000 in debt. Plus, without selling the house my $18,000 student loan doesn't get cleared off and I don't get a lump sum to help with moving costs, savings, etc.

It's a decent 3 bedroom, 3 bathroom home but I'm not sure it would make financial sense. I'd be in a much worse financial position to start off, and I'm not sure long-term would be much better. I probably couldn't get enough rent money to accelerate mortgage payments very much, which means I'd basically be renting the property for the full duration of the mortgage (unless I use other income/savings to pay it down) and probably only slightly better than breaking even.


----------



## motl

Should be moving on a car within the next month. Have a bonus coming at work next Monday. I'm looking at two scenarios.

I do not want to buy new. I'd like to either buy something older (ie. 2003-2006) for $5000 max OR buy something newer but outside the major depreciation drop (ie. 2009-2012) for $10,000 max (maybe $12,000) with $5000 down. I'd then finance the remaining $5000-7000 over 3 years, assuming I can get a decent interest rate. Even with 5%, the total interest paid over 3 years on a $5000 loan isn't that bad. Going with the newer option lets me find vehicles still under warranty, and I can have more confidence that it will last 5+ years. If I buy older, I might still get 5+ years out of it but the cost of maintenance over that time could easily close the gap on my initial savings.

Any thoughts? I'm sort of new at this.


----------



## motl

Decided against financing anything at all. I'm just going to save more and stretch the budget to 6-7k, which opens up options closer to 2007-2010 depending on models. I've already found a few for under 7k (taxes/fees accounted for) in 2009-2010 with decent mileage on them. I think that is a much smarter way to go. Even if he payments are small, why add another monthly expense if I don' need to?


----------



## KaeJS

motl said:


> Decided against financing anything at all. Even if he payments are small, why add another monthly expense if I don' need to?


Good idea. :encouragement:


----------



## RBull

motl said:


> Decided against financing anything at all. I'm just going to save more and stretch the budget to 6-7k, which opens up options closer to 2007-2010 depending on models. I've already found a few for under 7k (taxes/fees accounted for) in 2009-2010 with decent mileage on them. I think that is a much smarter way to go. Even if he payments are small, why add another monthly expense if I don' need to?


Good decision. Avoiding debt served me very well through most of my working years. 

Have a look a Hyundai elantra 2009- 2010- good car that depreciates a lot more than Honda/Toyota and was the year before styling change. You should be able to find a 2010 for 7k range, low kms and quite possibly good warranty left.


----------



## motl

Well I'm finally close to decision re: car. I've gone back and forth but decided to buy something newer. I'm going to see a 2010 Kia Forte SX tonight and have a feeling I'll buy it, unless something unexpected pops up. After haggling, my all-in price should be between $10,000 and $11,000. 

My parents agreed to let me use their LOC. I have about $4500 I can put down in cash, although most of it is in a TFSA so not sure I want to take it out if I don't have to. My parents LOC has a good interest (probably lower than dealership financing) and minimum payment is 2% of balance. They will let me park part or all of the payment on the LOC so long as I pay 2% monthly on whatever I use. I will then pay off the balance when my house sells, meaning the amount contributed to interest will be very low (even if it takes a while to sell the house). 

I've waited a long time to buy a car so I've decided to get something newer that I'll actually enjoy. I plan to keep whichever car I buy for at least 5 years, and hope for 7-10. For now I will probably drive 10,000 KM or less annually so it should be possible with regular maintenance. Plus, with all the BS that's happening, I feel like I should get something fun out of the whole deal. It's not like I'm unnecessarily splurging just to have a 'cool' car - I think investing in a newer car just outside of the depreciation drop is smart. I'm going to avoid long-term financing and pay almost nothing interest. And, even if the house sells on the low side, I can stand to take $6000 out of my expected lump sum and still be left with a $4000-14000 lump sum (depending on sale price) and no debt to get myself started in my new life.

On the plus side, my wife and I also just looked at joint expenses and realized we've been contributing more than needed. Going forward I'll be contributing $1000/m instead of $1200/m - this extra $200 plus $100 saved on a bus pass means my monthly expenses will only increase about $100/m due to car payment + insurance + gas. Not bad IMO.


----------



## KaeJS

motl said:


> 2010 Kia Forte SX
> 
> Plus, with all the BS that's happening, I feel like I should get something fun out of the whole deal.


You deserve it. You'll be alright. Get the car.

I used to work for Kia Motors. They have come a long way. The 2010 Forte's are a good car.


----------



## motl

Bought the Forte. Paid a little more than I planned but I waited a long time and am happy I found something I like. 

I put $3000 on my Mastercard (for points) and will cover that with non-TFSA savings and bonus from end of July. Since my house lump sum won't put me over TFSA cap for this year, I'll take $4500 from my TFSA (currently have $5200 in) and give to parents. Remainder (about $6500) will go on my parent's LOC. I will make minimum payment of 2% until house sells, although I will probably contribute more just to lower amount paid on interest.

Time to shop for insurance lol


----------



## motl

This thread has more become one to share my thoughts and get advice rather than track a budget. That will come once I sell the house and have a better idea of exactly how my finances/savings will operate going forward. I'll start a new thread for that. 

Right now I'm considering making a major change and looking for a job out West. My MA (International Affairs) is useless in Ottawa right now since the government isn't really hiring. Outside of IT, most other jobs here are sales/service (which is what I'm doing now - I despise it). 

My friend works for CN in BC and was telling me it may be a good option if I am OK with no using my degree (I'm not now, so why would that bother me). Would see my salary double from it's current status within 2-3 years. Job would be a lot of manual work and the hours would be unpleasant, but I'm mulling it over. Might be difficult to manage with my dog as I'd need to find a reliable sitter/walker for when I'm on 10-12 hour shifts or out of town for 2-3 days. Other than that, I was thinking I could start as a Conductor (my friend's job) and push hard to eventually move into either management or a corporate position in Montreal (ie. public relations, social responsibility, etc.) related to my degree.

I'd likely not be able to stay in ON due to competition, so I'd end up in BC, SK or AB. Starting salary is what I make now but would be about $15,000 more once training is finished. I 'think' CN would help cover some relocation costs.

What do you guys think? Not just this job specifically, but of labour type jobs out West. Even if I don't want to do it forever, I could spend 3-5 years there and save a nice amount and possibly take time of the side to retrain in something like IT so I could come home and find work. Otherwise, CN has good long-term options since it provides a pension, stock options, etc.

Thoughts?


----------



## Nemo2

^ Don't be afraid of getting your hands dirty.......money is the reason for working, and if you have the opportunity to make (and save) good money...go for it!


----------



## peterk

Now that I see you are serious I'll answer your PM motl. Definitely consider coming out west and getting into a trade. Toss the degree out the window (figuratively) and don't let it hold you to thinking inside a box. I am a well paid engineer and am even considered getting into a skilled trade (better money and less professional responsibility). If I were 18 again or had a degree with no related job opportunities, I would be diving head first into one of the unionized industries in Alberta. Welder and heavy equipment mechanic being two of the better trades to get into is the word on the street. These guys work 84 hours/week and once they become Journeymen can make about $5000/week net (after tax) working up in Fort McMurray.

I will PM you a link with all you need to know on the subject of getting a trade job in Alberta.


----------



## TK.61

I am sure you have talked with your friend (conductor) about his job, but from what I understand you have no schedule and are always on call. You can be gone for any amount of days with just a few hours notice (I may be misinformed though). If you are planning coming west you could find a more secure position like peterK mentioned, although it's not as easy to find an entry level position as he has made it out to be as there is lots of competition these days. And to be fair I think peterk is being overly optimistic; $5000/net equals about $425,000/yr gross. That is pretty hard to believe and is far from the average welder/HE mechanic salary I would guess. I agree with him that getting into a trade in AB is an unreal opportunity right now. Apprentices in many trades are able to make $100,000+ even before hitting journeyman status, and you don't even have to work up north either (though you would make more working up north). I am currently one of those peterk described as I have a bachelors degree in finance and am now pursuing a trade.

@peterk would you mind sending me the link on "all you need to know on the subject of getting a trade job in Alberta" as well? I am just curious what information you have.

Some other trades for OP to consider: Instrumentation, Electrician, Millwright, Power Engineer. The demand for these trades seems to be high, but due to popularness and word getting out about the high salaries competition is very high too.


----------



## peterk

Well, that is what you could make after several years of experience with all your tickets and JM. $45-60/hour, 1.5x after 8 hours, 2x after 10 hours, plus $150/day LOA, plus $150/day truck allowance... do the math! $425k/year yes if you worked every day of the year. More realisitically would be working 180-250 days/ year and making ~200-300k. Like I said, the money is HUGE. And of course it's not "easy". But it is there for the taking if one so wishes.

I will PM you the link as well. It is not what you'd call a "politically correct" website so I will refrain from posting it here and offending some of the more sensitive eyes of CMF. lol


----------



## Karen

moti, just wanted to let you know that I recently traded in a 2010 Kia Forte, not because I needed to but just because I decided to buy a brand new car which, with the limited amount of driving I do, will undoubtedly last me the rest of my driving days. I bought another Forte - a 2014 this time, so obviously I love the Forte. I'm sure you'll be happy with it!


----------



## motl

So far I am very pleased  Spending money on a car isn't something I enjoy doing, but so far I'm happy with what I got for the money I spent!

Also been researching the different information I've received about trades and AB jobs. Something I'm mulling over, although I may not be able to make such a major change until my house sells. Very tired of being handcuffed by it, but oh well.


----------



## motl

Alright, it's moving time. My wife decided to buy me out of the house as of November 1st. 

On that date I will be completely debt free with a few thousand in the bank. I'm currently searching for a new place to live. I've been looking around at apartments and condos to rent, and of course that has led to a few run-ins with condo promotions (especially on the Gatineau side). These units are beautiful and the prices are coming down a lot due to the number of condos built in recent years. There's one builder I spoke to that is offering $10,000 cash back on certain suits. I would be able to put down about $10,000, which means I'd essentially get back my down payment (I need to clarify how this works exactly). Condo fees are reasonable and already transferred to condo board, so shouldn't expect a massive hike. I need to discuss specifics, but home related costs would be around the same price as renting, give or take. 

It'd be a 1 BDRM condo, and I'd plan to stay there for a few years at the very least. Being newly single, I don't plan on a family any time soon and could live there forever for all I know. Otherwise, if a family became a priority in 5-10 years, I would likely rent it out.

I'm interested in building my savings first and foremost, but this seems like a decent opportunity if the cash back incentive will indeed work as a refund on my down payment. 

Thoughts?


----------



## cashinstinct

Condos can fall more. You see they want to unload their excess inventory right now... it can continue.

In my opinion, you should rent and keep your cash as a safety cushion. (rent either an apartment or a condo).

You don't plan family, but it can happen in a couple of years, who knows.

You can then invest your extra savings monthly in stocks/reits/other investments. Having one condo as the only investment is not idea I would suggest.

You will pay CHMC insurance because your downpayment will be only 5%, you will pay a "taxe de bienvenue" on your place (welcome sucker, pay a tax to the city)... lots of high fixed costs that do not happen when you rent.

ADD: You talk about moving around in the next few years depending on job / job market / etc... when you have a condo in one place, you will tend to stay around there. Renting to someone else while you are away? Why go there?


----------



## motl

cashinstinct said:


> Condos can fall more. You see they want to unload their excess inventory right now... it can continue.
> 
> In my opinion, you should rent and keep your cash as a safety cushion. (rent either an apartment or a condo).
> 
> You don't plan family, but it can happen in a couple of years, who knows.
> 
> You can then invest your extra savings monthly in stocks/reits/other investments. Having one condo as the only investment is not idea I would suggest.
> 
> You will pay CHMC insurance because your downpayment will be only 5%, you will pay a "taxe de bienvenue" on your place (welcome sucker, pay a tax to the city)... lots of high fixed costs that do not happen when you rent.
> 
> ADD: You talk about moving around in the next few years depending on job / job market / etc... when you have a condo in one place, you will tend to stay around there. Renting to someone else while you are away? Why go there?


True. These were my thoughts initially as I'd sworn off buying right now, but just wanted another opinion to make sure I wasn't passing up a decent opportunity.

Thanks


----------

