# New Couple, New House



## callyhan (Dec 7, 2010)

Hi Everyone, just looking for a bit of advice as to where to put my money to make the most of it! A bit of background:

SO and I are in our mid to late 20's. Bought a house together this year, 230 K on mortgage.

Income, me=$3400 net/month, him=$2800 net/month

*My assets*
-10 K in ING high interest RRSP
-7 K in ING high interest TFSA
-3 K in chequing to waive fees
-2 K in chequing at beginning of month for expenses
-defined benefit pension plan, matched by employer, approx $300 monthly.
-2006 Honda Civic, no leins (I am trying to sell, don't need two cars!)
-My horse (expensive hobby), worth approximately 5-10 K.

*My expenses*
Mortgage @ $560 bi weekly
Horse stuff @ $475 month

*SO assets *
-5 K in ING high interest RRSP
-5 K in ING high interest TFSA
-1500 in chequing at beginning of month for expenses
-1998 Toyota Camry

*SO expenses* are at about 1500 monthly for bills and other household living expenses.

We have no debt other than our mortgage, and we manage to each save 1K+ per month each.

I would appreciate any advice as to where we should allocate our future savings.

My rough plan for end of 2011 is something like this.

Me
-RRSP @ 13000-15000
-TFSA @ 15000
-Pay down mortgage with tax return
-Something for future investment in mutual funds or GICs

Him
-RRSP @ 10000
-TFSA @ 10000
-Pay down mortgage with tax return

Any bonus money to be used on home improvement or frugal vacations. We bought a 2bed/1bath home, and to protect our investment it will be wise to finish basement with an additional bed and bath. We can do the majority of the labour ourselves.

SO would love to buy a truck so he can do side jobs for cash in his free time, but I'm not so sure we can afford a down payment or monthly payments on a vehicle anytime soon.

I want to get our mortgage paid off as soon as possible, however I do not like the feeling of having an empty savings account to achieve this. 

What would you guys do? Thanks in advance!


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## plen (Nov 18, 2010)

Well all your savings are in cash, while comfortable and guaranteed is probably too little risk for your age. Even GICs would be better with guaranteed rates at least. I suggest though you at least look into adding some mutual funds, especially those oft spoken about here, the TD e-Series index funds.

ING also only gives you 1.5%, Ally for example gives 2%, if you're going to keep your savings in cash you might want to shop around and at least boost things a bit.

Your plan for 2011 certainly sounds like you're on the right path to making these adjustments. Keep reading and asking questions, talking with your SO and developing a plan and you'll feel much better about your direction.

Does your SO need a brand spanking new kickass truck to do side jobs? If the potential money he can earn from its use is significant then saving up for a used $10k or so beater seems like it'd only take you guys a short amount of time?


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## Potato (Apr 3, 2009)

Are you planning on going back to school? You've already bought a house, so that's the only other reason to take money out of your RRSPs in the near future I can think of... otherwise, if your RRSP money is indeed for retirement, and you're not even 30 yet, well, you're being _way _too conservative keeping it in cash. You have to find your own risk tolerance and be comfortable with it and all that, but _come on_. You've got a time horizon of several decades for that money, and a defined benefit pension to boot. I'd recommend at least making the RRSP have a substantial equity component, even if you keep the TFSA in cash for a security blanket.

Anyway, do some reading about equity investing, see if you can get comfortable with the risk tolerance needed (your situations certainly support it). That _other _Potato's blog is perhaps a good place to start, and CC has some good articles on index investing as well. There's a whole thread on books to read. Once you're ready, I recommend switching the RRSP over to TD, since the e-series are basically the cheapest non-ETF funds on the market, but the ING streetwise ones aren't terrible if you're keen on staying with ING.


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