# Suggestion for my saving plan



## gladaki (Feb 23, 2014)

Starting a New Money Diary to track progress. Will update it once in every 2 months.
I came to Canada in 2009, last year become PR (32 year old) and it was a long journey.
I consider myself financial disaster and trying to improve myself by reading this forum. Trying to learn more about investing.

Finally, I will be paying off my Car by next month,which I bought last October on 7.75 percent interest rate. 
13,000$ paid off in 7 months (Thanks to forum members for motivating me and RRSP Refund)

I know below plans are aggressive but I know they are achievable.

My aim is to buy house in next 2 years (350k$ (House Price) is what I am aiming for) and would like to develop plan to save some money.
Most of my friends told me to go with 5% down payment (As they did), but I don't want to pay CHMC insurance and like to keep my monthly payment low.

Currently, I am only working member in my family. My spouse is still in school, she should be working 
by next mid year.

Currently, I make 75,000 CAD $

RRSP
RRSP:14081$
RRSP Room is 16818
Currently contribute 12% of my salary and 3% match by my employer)(TD iseries index funds)
For maxing it out I need 7% more salary flow in RRSP. Whatever appraisel (if any) i get this year will
direct towards RRSP.

TARGET April 2016 RRSP;16818+14,000=30899$

TFSA
Room Available:
37390k$
Investments:
3059$

TARGET April 2016 TFSA:3059+18000 (1500 per month)=21,059 $ (Will be doing Passive investing,really wanted to buy some strong dividend stocks but
I think for someone in my situation passive investing is better)(What you guys think)
(Already have RRSP setup for TD I series once its 25k will transfer to TDW from TD Future Builder)
(In TFSA, I was thinking of putting money in blue chip companies, buying once in every two months)

Emergency Fund
Tangerine HISA:3205
Target April 2016 Emergency fund: 3805 (50$ per month till April 2016)

FOREIGN HIGH INTEREST ACCOUNT
Foreign Account:1800
TARGET April 2016 FOREIGN ACCOUNT:4848 (Subject to Currency fluctuation)

Current Assets:22740 $ (Of course RRSP is all I have)
Target April 2016 Assets:60611$


I will be aggressive this year on investing side.
Need to read wealthy barber return again and again










I didn't calculated any return on all the above accounts. It will be aggressive saving for next one year for me.

QUESTION:
So,My spouse has 70k$ LOC issued (prime+0.5), Is it a good idea to use that money for doing downpayment in future (2017). Although it is issued by bank for her school but I wonder if it really matters. She will be using 10k$ from it maximum and it will expired 2 year after the school
Thanks every one for motivation and suggestions.


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## Ag Driver (Dec 13, 2012)

Good on your for taking control of your investments and creating a plan! I like the fact that you have 12% of each pay cheque allocated towards savings. Personally, I would continue with the RRSP with what ever the employer is matching. This is free money.

For everything else, try and maximize the TFSA.

Try to obtain 20% down or better to eliminate those pesky CMHC fees. If this is not a possibility, but you are still determined to be a home owner; They are tiered, so the close to 20% you get. 




gladaki said:


> So,My spouse has 70k$ LOC issued (prime+0.5), Is it a good idea to use that money for doing down payment in future (2017). Although it is issued by bank for her school but I wonder if it really matters. She will be using 10k$ from it maximum and it will expired 2 year after the school[/COLOR]
> Thanks every one for motivation and suggestions.


Do NOT borrow money in order to afford a down payment. If you can not afford a down payment, you simply can not afford a house. Ensure you are financially stable and can afford to front the money for the mortgage prior to diving into the housing market. Your salary vs mortgage amount is breaking the rule of thumb in terms of sustainability. The rule of thumb is 3 times your salary. This will be difficult on your salary alone without having about 15-20% down. Even that is pushing the rule of thumb. At 20% you are sitting at 3.7 times your salary. 

Today's interest rates are a gift. Please sit down and do some math and ensure that you can still sustain your mortgage with an increase in interest rates. Do not make yourself "house poor" -- ie. You can afford nothing but the payments on your house. 

Overall, I think your plan is a bit unrealistic without knowing your expenses, liabilities, partners income (shared?), and other variables. BUT This is why we plan and gather input!


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## Feruk (Aug 15, 2012)

In my opinion, you don't make enough to afford a $350K house as your salary feeds 2 people. Therefore I think your plan to wait until your wife is working is very smart. The 20% down plan is good. The idea of using LOC for your down payment absolutely is not. If your goal is to have a down payment in 2 years and you actually stick to your saving targets for those 2 years, you shouldn't have an issue without the LOC.


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## gladaki (Feb 23, 2014)

Feruk said:


> In my opinion, you don't make enough to afford a $350K house as your salary feeds 2 people. Therefore I think your plan to wait until your wife is working is very smart. The 20% down plan is good. The idea of using LOC for your down payment absolutely is not. If your goal is to have a down payment in 2 years and you actually stick to your saving targets for those 2 years, you shouldn't have an issue without the LOC.


Thank you for input. Yes, you are right. Any thumb rule of salary vs house one can afford.


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## 1980z28 (Mar 4, 2010)

I have three sons one 19, 31 and 33

I help all on a regular basics

I am very cruel to them as they have in they possession 25 % of there income when they left home,I have instructed both not to have a house buy to rent

So far so good

Last son is still at home and is 19,has to bank 1/2 of income as living at home is free

Have map out a plan for kids to never to own a home

Also at home is my 12 year old GSD who runs me

What I am saying is why a house


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