# Growing Family - Money Diary



## canucklehead (Jan 18, 2014)

Hello,

I didn't see too many diaries for families with multiple kids, so I'll add mine. My wife and I are in our mid 30s, with two preschool children and another on the way at the end of the year. Our long term goals are to retire in our early 50s (51 if my current back of the napkin calculations are accurate), and a short term goal is to buy a larger vehicle 

My Gross income is $70k, and my wife's is $44k at 0.8FTE until next winter when she'll be going on maternity leave.

We are trying to save about $24k annual in retirement accounts (index funds) until the house is paid off in 9 years, then about $44k after that until. My concern is whether this plan is sustainable as the kids grow up. 

Here is our 2014 budget, along with the first 3 month average.

2014 2014 Q1
Budget Average

Income: 6400	7475
Expenses: 4850	5075
Mortgage: 1600	1600
Food: 750	745
Household: 275	50
Child Care: 850	740
Utilities: 160	205
Phones: 95	130
Gas: 165	140
Parking: 70	70
Internet: 25	95
Entertainment/Eating out: 100	95
Health: 50	170
Donations: 650	645
Petty Cash: 60	40
Misc: 0	350

Investments/Savings: 1500	950
RESPs: 420	485
RRSPs: 1080	465

Checking: 3000	4500
Savings Account 1.9%: 7000	10000
Credit Card: 2500 3500

My RPP: 34500	37000
Spouse RPP: 16600	16300
My TFSA: 270	270
Spouse TFSA: 170	170
My RRSP: 6900	7900
Spouse RRSP: 6600	7250
Spousal RRSP: 100	500
RESPs: 15500	18000
Total: 80640	87390

House Tax Assessed: 315000	315000
Mortgage: 193000	189000
Car: 5000	5000

Assets: 408140	421890
Liabilities: 195500	192500
Net Worth: 212640	229390


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## blueeyetea (Feb 27, 2013)

If I go with your budgetted income of $6,400/month minus budgetted expenses of $4,850/month - the difference of $1,550/month x 12 months = $18,600, a bit short of your goal of $24K/year you want to devote to RRSPs. If you go based on your 3 month average, that amount would be even less. 

From my point of view, your budget is pretty strict and ambitious. I don't see anything set aside for vacations, education savings, credit card payments, or repairs on the house. As your children get older, your expenses will also go up - food, clothing, medical and dental care, school supplies and events, toys, organized activities. Is the savings account your emergency fund? What about money set aside to buy a larger vehicle? Will it cut into your savings rate? Where in your budget are expenses like insurance and home taxes?


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## nobleea (Oct 11, 2013)

blueeyetea said:


> If I go with your budgetted income of $6,400/month minus budgetted expenses of $4,850/month - the difference of $1,550/month x 12 months = $18,600, a bit short of your goal of $24K/year you want to devote to RRSPs. If you go based on your 3 month average, that amount would be even less.
> 
> From my point of view, your budget is pretty strict and ambitious. I don't see anything set aside for vacations, education savings, credit card payments, or repairs on the house. As your children get older, your expenses will also go up - food, clothing, medical and dental care, school supplies and events, toys, organized activities. Is the savings account your emergency fund? What about money set aside to buy a larger vehicle? Will it cut into your savings rate? Where in your budget are expenses like insurance and home taxes?


The 24K could be pretax amount. It would be a low to mid level marginal tax bracket to bring the 18.6K to 24K pre tax.


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## canucklehead (Jan 18, 2014)

Thanks for the comments. We do have another $5k in pension contributions (employer matched to 3%), plus sizable tax refunds due to the child care expense credits which will get partly redirected towards rrsp/tfsa. This hopefully will help us get to the $24k a year in savings. 

Most of our expenses are on the credit card, so that is not an extra amount over the budgeted values. Educations savings are covered by monthly RESP contributions (td e-series). Other expenses are covered by 4 extra annual paychecks, plus future raises and promotions. Savings plus access to LoC is the emergency fund.


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## b_foot (Dec 16, 2010)

We're in the same age group and demography. Perhaps I could speak a thing or two about the budget. We have a 4 and 2 years old -- our child care expense is much greater than yours. Aside, kids activities and clothing may add up -- e.g. travel to local zoo/museum, winter boots, snow pants, jackets, shoes, clothing, gloves, etc. I don't have a hard number on this, I wouldn't surprise if we spend no less than $3K on 2 kids. A trip to Ripley's aquarium in Toronto would set you back by $200 with parking, tickets, etc. Just saying. However, your donation is much higher than we could afford. 

I'm sure you have considered it -- with 3 kids, car wouldn't cut it. You'd need a minivan. 

Overall I think you guys are very discipline in spending. I don't think you will have much problem. Cheers.


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## Pennypincher (Dec 3, 2012)

Nothing really new to add that the others haven't said, but congratulations on the addition of another child to your family. You seem to be spending your money wisely and understanding the importance of not going into debt and spending frivolously. 

I strongly agree with others that expenses relating to children will increase. I am surprised how low your daycare expenses are. Is it part time? Maybe you don't live in a major urban city where your daycare expenses you state would cover one child and not two.


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## canucklehead (Jan 18, 2014)

*2014 Q2 Update*

Averages for April-June 2014

Income: 9400
Expenses: 11000
RRSPs: 400
RESPs: 420

As of July 1:
Checking: 7500
Savings: 3600
My RPP: 39200
Spouse RPP: 16700
My TFSA: 290
Spouse TFSA: 170
My RRSP: 9000
Spouse RRSP: 7750
Spousal RRSP: 550
RESPs: 20200
House: 315000
Car: 9500
Total Assets: 429,460

Mortgage: 184,700

Net: 244,760

Notes: April included our tax refund, which raised the overall monthly income. April also has the highest expenses of the year, as house/car/life insurance come out, as well as our sports season tickets. In June we paid our property taxes.

In June we also sold our car and bought a new-to-us van.

So overall there was a lot of volatility in our spending this month, but that should settle down for the rest of the year so that we can contribute more to savings again.

@pennypincher: Regarding the child care expenses, we were in a home day care but switched to a center last month (the rates are actually lower now, but we pay for every day of the week, even if we don't use it so it will be a wash) I haven't looked into it but I assume the day care spaces are subsidized by the provincial government.


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## canucklehead (Jan 18, 2014)

What was supposed to be a quarterly update turned into a bi-annual one, but I will post a progress report for my faithful readers 

Since the last update, we are now a family of 5 (3 kids), two vehicles (14 and 10 years old), and one income (~90k-100k).

*January 2016*
Net Income: 6600
Expenses: 3000
Mortgage: 2700
Investments: 2200
*we live on last months income, so Dec 2015 income was 10,600, and Jan 2016 had three mortgage payments*

Cash: 22,000
Home Value: 315,000
RRSPs, SRRPs, RPP, LIRA: 129,000
TFSA: 1000
RESPs: 35,000
_Total: 502,000_

Revolving Credit Cards: 1000
Mortage: 153,000
_Total: 154,000_

Goals for 2016:
1) contribute 5,500 to TFSA
2) contribute 12% gross salary to RRSP (3+3% goes to company pension plan), into spousal RRSP for now
*currently have combined 85,000 in TFSA room and 110,000 in RRSP room


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## peterk (May 16, 2010)

Awesome! Looks like you met your goals and then some. $120k increase in less than 2 years with three kids and moderate incomes (and now only one income?). Very impressive.


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## Just a Guy (Mar 27, 2012)

As a parent of 4 kids, I can tell you that they get significantly more expensive as they age. However, they do become significantly more useful as well.


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## canucklehead (Jan 18, 2014)

*End of 2016 Update:*

Cash: 33,000
Home Value: 315,000
RRSPs, SRRPs, RPP, LIRA: 178,000 (*see note 1)
TFSA: 2500 (*see note 2)
RESPs: 47,000
_Total: 575,500_

Revolving Credit Cards: 1000
Mortgage: 137,000
_Total: 138,000_

_Net: 437,500 (2016 Gain: +89,500)_

*Notes:*

1) We've been trying to reduce Net Income to take advantage of the generous Canada Child Benefit by contributing extra to RRSPs. Above income of 90500 the marginal tax rate plus the CCB phaseout combine for 51.4%, between income of 67000-90500 it is 45.9%.

2) The mortgage renewed this fall for 5y at 2.29% for 12y amortization. We had been paying extra for the mortgage every month, but decided to change tactics going forward. The goal is still to payoff the balance in 5 years, but the extra will be placed into a TFSA so that the money can stay more liquid instead of getting locked up in the house. Right now the TFSA Mortgage Payoff fund is 100% VCN. Is this reasonable for the next 5 years?

Any comments are greatly appreciated. Thanks to the community for all the advise on this forum.

Happy New Year!


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## mordko (Jan 23, 2016)

If your goal is to pay off the mortgage in 5 years then VCN isn't really an appropriate vehicle for your savings towards the repayment.


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## canucklehead (Jan 18, 2014)

*Here is our latest update for 2017, as of the end of June.*

Cash: 29,000
Home Value: 315,000
RRSPs, SRRPs, RPP, LIRA: 209,000
TFSA: 9000
RESPs: 54,000
Total: 616,00

Revolving Credit Cards: 3000
Mortgage: 132,000
Total: 135,000

Net: *481,000* (2017 YTD Gain: +43,500)

Notes: Since most of our investments are in CAD, they've taken a bit of a hit recently due to the rise in the dollar, but no concerns there as everything is a bit more affordable to buy now with our bi-weekly purchases.


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## james4beach (Nov 15, 2012)

Congrats, your net worth has gone from 213K (in 2014) to 481K now. That's an impressive gain in such a short period. Was that done while saving 24K a year? If so, you must have had some spectacularly good investment returns!

I don't understand what you mean about your investments taking a hit. Can you remind us, what are you invested in? You said index funds earlier. Are all 272K of investments (including RESP account) in index funds? What kind of indexes?


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## james4beach (Nov 15, 2012)

Perhaps I'm missing something but here's something that confuses me. I was trying to estimate your rate of return. In your first post (early 2014) you had about 94K in your cash+investment accounts. Today you have about 301K in cash+investments.

Assuming you added 24K a year, to make a balance go from 94K to 301K in 3.5 years, you'd need an average annual return of about 18%.

Were you able to add more than 24K savings each year? Or is there another factor I'm missing?


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## CalgaryPotato (Mar 7, 2015)

Wow, you are raking in money like crazy. I admire your budgeting skills, after day care, mortgage and other essentials you are able to save a huge portion of your after tax income, good for you!


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## canucklehead (Jan 18, 2014)

james4beach said:


> Perhaps I'm missing something but here's something that confuses me. I was trying to estimate your rate of return. In your first post (early 2014) you had about 94K in your cash+investment accounts. Today you have about 301K in cash+investments.
> 
> Assuming you added 24K a year, to make a balance go from 94K to 301K in 3.5 years, you'd need an average annual return of about 18%.
> 
> Were you able to add more than 24K savings each year? Or is there another factor I'm missing?


I had to go back and check the data to find out 

At the end of 2015 when my wife left her permanent work, her company pension was taken out and placed in a self directed LIRA. At the end of 2016 we received a small inheritance, some of which was spent but most was put into retirement accounts. So between those two events that accounts for about 20% of the gain you are seeing.

Based on the XIRR calculations in my spreadsheet, my retirement accounts returned 11.7%, 12.7% and 7.2% in 2014, 2015 and 2016 respectively. 

I'm not an expert, so I keep it simple with a basic CCP setup of VCN, XAW, and VAB/ZAG in the retirement accounts and TD E-Series in the RESPs. Rebalanced approximately monthly as new cash is added.


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## canucklehead (Jan 18, 2014)

CalgaryPotato said:


> Wow, you are raking in money like crazy. I admire your budgeting skills, after day care, mortgage and other essentials you are able to save a huge portion of your after tax income, good for you!


No more day care which helps, and my wife is working part time in the evenings a few days a week which covers the mortgage.


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## james4beach (Nov 15, 2012)

canucklehead said:


> At the end of 2015 when my wife left her permanent work, her company pension was taken out and placed in a self directed LIRA. At the end of 2016 we received a small inheritance, some of which was spent but most was put into retirement accounts. So between those two events that accounts for about 20% of the gain you are seeing.


Ah! That makes sense. Thanks for sharing 



> Based on the XIRR calculations in my spreadsheet, my retirement accounts returned 11.7%, 12.7% and 7.2% in 2014, 2015 and 2016 respectively.
> 
> I'm not an expert, so I keep it simple with a basic CCP setup of VCN, XAW, and VAB/ZAG in the retirement accounts and TD E-Series in the RESPs. Rebalanced approximately monthly as new cash is added.


This is great stuff! Very healthy returns and excellent vehicles. Nice and simple is the best way. Your results speak for themselves!


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## canucklehead (Jan 18, 2014)

*The end of year update for 2017:*

Cash: 33,500
Home Value: 315,000
RRSPs, SRRPs, RPP, LIRA: 231,500
TFSA: 13,500
RESPs: 62,000
Total: 655,500

Revolving Credit Cards: 1500
Mortgage: 123,000
Total: 124,500

Net: *531,000* (2017 Gain: +93,500)
Retirement XIRR: 9.4%
RESP XIRR: 10.8%
[no weed or bitcoin here  ]


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## canucklehead (Jan 18, 2014)

*As of July 1, 2018*

Cash: 16,500 
Home Value: 343,000 (assessed tax value increase, decided to increase this amount for the first time in 7 years since purchase)
RRSPs, SRRPs, RPP, LIRA: 250,000
TFSA: 17,500
RESPs: 68,500
Total: 695,500

Revolving Credit Cards: 3500
Mortgage: 112,500
Total: 116,000

Net: 579,500 (2018 YTD Gain: +48,500 / 9.1%)


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## canucklehead (Jan 18, 2014)

*As of April 1, 2019*

Cash: 19,000
Home Value: 343,000
RRSPs, SRRPs, RPP, LIRA: 275,000
TFSA: 17,500
RESPs: 78,500
Total: 733,000

Revolving Credit Cards: 4000
Mortgage: 95,000
Total: 99,000

Net: 634,000 (Gain since last update: +54,500 / 9.4%)


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## gladaki (Feb 23, 2014)

Your Diary Motivated me to start one..I couldn't believe that someone can save money with kids.
My son is year old and day care cost is close to 1300 till he is 19 month then it will go down to 1150.

I will get my act together n start saving..will start my diary soon.
Questions:
Whats your RESP looks like :distribution among stock and bonds
How often you rebalance your TFSA and RESP


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## canucklehead (Jan 18, 2014)

gladaki said:


> Your Diary Motivated me to start one..I couldn't believe that someone can save money with kids.
> My son is year old and day care cost is close to 1300 till he is 19 month then it will go down to 1150.
> 
> I will get my act together n start saving..will start my diary soon.
> ...


Thanks for the comments. Glad I could be an inspiration, as I was also inspired by others on this forum.

For the RESPs I use a very similar strategy as shown on https://www.milliondollarjourney.com/the-resp-strategy.htm. Every month or two I'll use the new contribution monies and buy whatever asset is out of balance. In the TFSA I recently switched everything into XBAL.


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## HomeChef (Jan 14, 2014)

canucklehead said:


> Thanks for the comments. Glad I could be an inspiration, as I was also inspired by others on this forum.
> 
> For the RESPs I use a very similar strategy as shown on https://www.milliondollarjourney.com/the-resp-strategy.htm. Every month or two I'll use the new contribution monies and buy whatever asset is out of balance. In the TFSA I recently switched everything into XBAL.


canucklehead - in similar position to you and have been starting to think about changing asset allocation in RESPs. We have 3 kids aged 4, 6, 8 and currently RESP is all in VGRO. How did you make the decision when to switch to a balanced fund? I estimate we will need the RESPs from 2029 - 2039 (10-20 yrs from now)


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## Butter (Nov 26, 2017)

HomeChef said:


> canucklehead - in similar position to you and have been starting to think about changing asset allocation in RESPs. We have 3 kids aged 4, 6, 8 and currently RESP is all in VGRO. How did you make the decision when to switch to a balanced fund? I estimate we will need the RESPs from 2029 - 2039 (10-20 yrs from now)


instead of going balanced, why not just overweight ZAG.to

80% VGRO.to 20% ZAG.to is 
60 equities / 40 bonds

just keep adding to ZAG as the kid gets older, if market crashes you can adjust later.


My question is what does a kid do with $70,000 RESP????? I only used about 20k for my degree


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## canucklehead (Jan 18, 2014)

*As of Dec 28, 2019*

Cash: 15,000
Home Value: 343,000
RRSPs, SRRPs, RPP, LIRA: 310,000
TFSA: 19,000
RESPs: 91,000
Total: 778,000

Revolving Credit Cards: 4500
Mortgage: 82,000
Total: 86,500

Net: 691,500 (Gain since last update (Apr 1): +57,500 / 9.1%)

History
Apr 1 2014: 229:390
Jul 1 2014 244,760
Jan 1 2016: 348,000
Jan 1 2017: 437,500
Jul 1 2017: 481,000
Jan 1 2018: 531,000
Jul 1 2018: 579,500
Apr 1 2019: 634,000
Dec 28, 2019: 691,500

Retirement Account XIRR
2013: 17.75%
2014: 11.71%
2015: 12.66%
2016: 7.23%
2017: 8.85%
2018: (-2.60%)
2019: tbd

Notes: 
-Another nice year for index funds. I'll figure out my 2019 XIRR next week and post it here.
-I enjoy reading books on personal finance and history. With our mortgage getting smaller we've decided continue making only minimum payments and redirect the extra to investment accounts.


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## canucklehead (Jan 18, 2014)

*As of Nov 1 2020*

Cash: 9,000
Home Value: 354,000
RRSPs, SRRPs, RPP, LIRA: 340,000
TFSA: 19,000
RESPs x3: 99,000
Total: 821,000

Revolving Credit Cards: 3000
Mortgage: 72,000
Total: 75,000

Net: 746,000 (+54,500 / 7.3% since last update)


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## canucklehead (Jan 18, 2014)

*As of July 1 2021*

Cash: 12,000
Home Value: 400,000
RRSPs, SRRPs, RPP, LIRA: 433,000
TFSA: 20,000
RESPs x3: 124,000
Total: 989,000

Revolving Credit Cards: 3000
Mortgage: 65,000
HELOC: 55,000
Total: 123,000

Net: 866,000 (+120,000 / 16.1% since last update Nov 2000)


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## canucklehead (Jan 18, 2014)

*As of January 1 2022*

Cash: 28,000
Home Value: 400,000
RRSPs, SRRPs, RPP, LIRA: 474,000
TFSA: 36,000
RESPs (x3): 140,000
Total: 1,078,000

Revolving Credit Cards: 2000
Mortgage: 199,000were
HELOC: 0
Total: 201,000

Net: 877,000 (+11,000 since last update July 2021) 

-2021 major changes included a new mortgage refinance to role in our HELOC balance from a home renovation project, now 25 years away from a paid off house instead of 5  But that is deliberate in order to minimize mortgage payments and max out RRSP and TFSA contributions.
-Happy New Year to you all!


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## canucklehead (Jan 18, 2014)

*As of Oct 1 2022*

I thought this would be a good time to post on updated, with markets downs, and inflation high, as a snapshot in time of how things are going. In hindsight going with a variable rate mortgage last November doesn't appear to have been the correct choice. Continuing to buy XGRO on sale in RRSPs and TFSAs.

Cash: 23,000
Home Value: 400,000
RRSPs, SRRPs, RPP, LIRA: 414,000
TFSA: 38,000
RESPs (x3): 127,000
Total: 1,002,000 (-76,000 from last update)

Revolving Credit Cards: 3400
Mortgage: 195,000
HELOC: 0
Total: 198,400 (-2600 from last update)

Net: 803,600 (-73,400 since last update Jan 1 2022) 

Staying positive. Cheers!


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## bigmoneytalks (Oct 3, 2014)

canucklehead said:


> *As of Oct 1 2022*
> 
> I thought this would be a good time to post on updated, with markets downs, and inflation high, as a snapshot in time of how things are going. In hindsight going with a variable rate mortgage last November doesn't appear to have been the correct choice. Continuing to buy XGRO on sale in RRSPs and TFSAs.
> 
> ...


Thanks for posting even when markets are down...not many are updating their money diaries for that reason...


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