# frugal budget - any insights on changes?



## sunworship (Mar 15, 2019)

Adopted a frugal budget to attack our debt.

Household combined income: $180,000.00 
Credit card debt: $8800 (his not mine, but collectively "ours") interest rate %14.99
Student debt: $18,000 - interest rate %5
Savings: $35,000.00 in rsps
Location: Toronto

Monthly breakdown (we don't have cars)
Take home pay: $9200

Rent: $2515
Bills: 600 (two phones, unlimited internet, Bell TV, utilities)
Groceries: $800
Transportation: $200 (TTC presto)
Debt payments: $4000 (debt free by October)
Savings: $800 to rsp
Netflix: $14.00 
Discretionary (clothing, eating out, beauty, entertainment): $271 (this is hard but we make it work) 

any advice or insights? We plan to give up bell TV for a $50.00 savings. We've canceled all other subscriptions except netflix.


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## like_to_retire (Oct 9, 2016)

All quite reasonable except for that credit card debt. That's painful, and so unnecessary on that high income you enjoy.

Netflix, plus a basic Bell package isn't excessive with your income level and you have to watch making your life extra hard such that you get discouraged. Just stop using that credit card, or at least pay it off every month. I've had credit cards for about 50 years and I have never had a single month in that time that it wasn't completely paid off. You NEVER allow a credit card balance - Full stop.

You've discussed the student loans in another thread. Forget that and pay off that credit card.

ltr


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## sunworship (Mar 15, 2019)

thanks. I paid off my husband's credit card debt when we got married and I thought it was our mutual goal to remain credit card debt free. He recently revealed that he let is creep back up due to a failure to budget. He got a part-time job and is now paying it off aggressively ($800 a month). I think although I could pay his credit card debt off again and then attack the lowest interest student loans (which are mine), he will learn more and we will reach mutual habits and financial values sooner if he goes through this repayment on his own. 

If by September when my student debt is paid off, he has consistently made his $800 a month payment to his credit card, I will then combine our finances and "we" will pay off his credit card debt faster. I am just not eager to do so until I see if he can adjust to living a within his means / sacrificing to pay of debts lifestyle.


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## 319905 (Mar 7, 2016)

The RSP sounds like dead money to me since no detail included ... if it's his rsp I suggest he use that to pay off that 14.99% loan ... why am I thinking it's not his rsp ...


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## sunworship (Mar 15, 2019)

it is not his rsp. it's mine but will be used for our down payment on a very modest house in the GTA in March of 2020 when I've grown it to $55,000.00 and we are collectively debt free (my debt free date is september, and his is December if all goes well).


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## like_to_retire (Oct 9, 2016)

sunworship said:


> I think although I could pay his credit card debt off again and then attack the lowest interest student loans (which are mine), he will learn more and we will reach mutual habits and financial values sooner if he goes through this repayment on his own.


Smart.

I'm thinking that you should be the one in charge of finances.

I appreciate your situation and the dance that needs to be maintained between relationship and putting your foot down.

Myself, I spent a lot of time educating my two sons with regard to finances as they grew up and both married wonderful girls. One daughter-in-law is a whiz with investing, so no problems there, but the other doesn't seem to appreciate credit card debt and it's always a struggle for one of my sons to reign it in. Finances are a huge problem for couples, so it needs to be addressed by the responsible party. Sounds like that's you.

ltr


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## Plugging Along (Jan 3, 2011)

It looks like your budget is pretty frugal. The only place where you might be able to cut out a little more depending on how motivated you are is your groceries, that's without know what you actually eat.

In terms of your spouse spending, it does make sense that you lest him repay his debt, but it might take a little while to get him in that discipline. Don't be too strict otherwise that may turn him off. My spouse was on the spendier sider (and still is), we have had to come up with things to make it work over the years


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## My Own Advisor (Sep 24, 2012)

like_to_retire said:


> Smart.
> 
> I'm thinking that you should be the one in charge of finances.
> 
> ...


I echo that....well done with the partner. These are not easy conversations to be had.

Some thoughts:

1. Make debt payments automatic if not already done. If/once student debt and CC debt is gone, hopefully for good by October, then those debt payments can be maintained and simply used as savings. 

2. Assuming you keep some discipline and save at least $2k per month for the next 20 years (not $4k per month needed) then you'd likely have close to $1.1 M by earning 7% return in the next 20 years. Something to think about.

3. The other $2k per month (out of $4k per month debt repayments now) could be used to a) save for house and b) pay down mortgage over next 20 years. This way you'd be debt free as well on or before 20 years for sure and probably take a few very nice trips in between.

4. I wouldn't worry about scrimping on Netflix or anything else. Live your life


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## fireseeker (Jul 24, 2017)

sunworship said:


> Adopted a frugal budget to attack our debt.
> Household combined income: $180,000.00
> Take home pay: $9200


I'm confused by these figures, Sunworship. 
The combined take-home pay is $110,000 a year, which implies you're losing $70,000 to payroll deductions.
Tax in Ontario at $90,000 in income is roughly $20,000. EI and CPP is another $4,000. 
Even if your incomes are unbalanced, it wouldn't explain $70k in deductions.


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## sunworship (Mar 15, 2019)

Fireseeker - hmm you are right it doesn't seem to add up.

My income is $150,000.00 and my monthly take home is $7200.00. I pay into a defined benefit pension. 

His income is $32,000.00 and his take home is $1600.00... so you are right he would be being taxed 40% on his $32,000.00 income for his take home to only be $1600.00 a month. 

So... thank you - I called him and it turns out he isn't sure what his salary is. *FOREHEAD SMACK* which means I almost committed fraud last year when filling out a mortgage application. Luckily we didn't put it through. I think it is time to see a financial counselor. I can't believe he's been confidentally telling me $32,000.00 is his salary when he isn't even sure what it is.


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## jargey3000 (Jan 25, 2011)

ditto on reducing / eliminating thr credit card debt
and, FWIW we manage to get by on less than half of that $600 figure for what you include under "Bills"...


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## like_to_retire (Oct 9, 2016)

sunworship said:


> I think it is time to see a financial counselor.


What could they possibly tell you that you don't already know? Don't waste your money. The financial industry, whether advisors or counselors, are experts at taking your money.

ltr


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## sunworship (Mar 15, 2019)

like_to_retire said:


> What could they possibly tell you that you don't already know? Don't waste your money. The financial industry, whether advisors or counselors, are experts at taking your money.
> 
> ltr


My husband is not hearing me and I think it might be beneficial for him to hear it from a neutral third party. As I've just discovered, he inadvertently/negligently almost caused me to commit fraud when I almost applied for a mortgage previously by me reporting his salary and him not actually being confident of what it was - turns out he was wrong and has misremembered his base salary. Thank goodness we did not submit it!


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## OnlyMyOpinion (Sep 1, 2013)

For different reasons perhaps, I would also suggest treading carefully re/ seeing a FC. 
It looks to me that you already have a good handle on things. I'd be concerned that the two of you going to see a FC might make him defensive and resentful if he is not yet on the same page as you re/ finances. Some additional discussion & education at home might be worthwhile? Carefully & tactfully though - having different financial goals can be very disruptive of a couple's relationship.

It's been a while, but I think a lender would probably require some proof of income such as a recent T1 or NOA from each of you. It should be justifiable for you to have those in hand for both of you before the next mortgage app or pre-approval?


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## like_to_retire (Oct 9, 2016)

sunworship said:


> My husband is not hearing me and I think it might be beneficial for him to hear it from a neutral third party. As I've just discovered, he inadvertently/negligently almost caused me to commit fraud when I almost applied for a mortgage previously by me reporting his salary and him not actually being confident of what it was - turns out he was wrong and has misremembered his base salary. Thank goodness we did not submit it!


Fair enough. You seem like such a smart and informed person that I thought I might direct you away from the financial industry, as they are there to fund their own retirements, but I get it, some people don't completely trust what their partners are saying, yet are willing to listen to so-called "professionals". Be sure that the "professional counselor" doesn't have some "product" to sell you.

ltr


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