# Transitioning from our 20s into 30s



## jetsfan (Mar 20, 2015)

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## nathan79 (Feb 21, 2011)

*Cell Phones: $1,800*

$75 each per month? Is it possible to reduce that (maybe a family plan or something?). Or cut down on data use.

*Individual Expenses: $12,000 (we put $500/mth each in our personal accounts which we spend whatever we want on individually, including clothes, donations, gifts, going out separately, and other leisure)*

If you cut that amount down to $250/mo each you could balance your budget and even save a few hundred. I'm not sure how much pain that would cause you.

Everything else looks fine, though I'm not sure abut the home renos. I don't know what your house is like, but I'm always skeptical because people tend to go overboard on renos. But if it needs to be done and will add value to the house, it could pay for itself when you go to sell.


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## jetsfan (Mar 20, 2015)

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## jamesbe (May 8, 2010)

Nice to put a budget together. But are you working with a gov type budget? It doesn't balance. It HAS to balance or it's simply not sustainable.

Although obviously you seem to have some spare money in expenses there, why not make that balance out?

Also, if your mortgage rate is lower than car loan rate, you should be paying the car loan first not the mortgage. rates are so low now for mortgage rates I don't agree with being extra aggressive to pay down a mortgage with a rate in the low 2% range


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## jetsfan (Mar 20, 2015)

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## heyjude (May 16, 2009)

I think you two are going to do just fine. You are far more proactive than I was at your age. Get control of your spending so that you are always LBYM, pay down debt, and monitor. When you have kids, be prepared for higher expenses.


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## crazyjackcsa (Aug 8, 2010)

Nathan79 hit the nail on the head. The budget balances if you cut out some of that 12-grand. Or if you cut back on the prepayments. Or do a little of both.

You're going to need cash on hand to pay for unforeseen expenses and kids. You don't say what your cash position is like.

There's no point hammering away at a mortgage, or budgeting 12k a year on stuff when you can't really afford to.


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## Feruk (Aug 15, 2012)

This plan is not well thought... You've already got a budget that is negative and you are expecting to have drained all your free cash in less than 5 years. What happens if you lose your job?? I would not feel comfortable in your shoes having any less than $50K in liquid assets (cash, stocks, ETFs) outside of a pension or RRSP. While paying off the mortgage as fast as you can is a noble goal, it's pretty clear from your numbers that you can't afford to do that. Denying this reality just adds a great deal of risk into the situation.


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## jetsfan (Mar 20, 2015)

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## CalgaryPotato (Mar 7, 2015)

He isn't suggesting it is your 5 year plan. He's saying if you spend 5K more than you make for each of the next 5 years you'll be out of cash. (So yes that is your 5 year plan in a way based on this budget)

Maybe you're different but people in general don't come in under budget on anything, ever. If you budget a deficit you'll probably come in at a deficit. If you sit down and figure out where you can save, and come up with a positive budget, hopefully you'll make it and even if you don't, you'll still break even.


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## jetsfan (Mar 20, 2015)

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## jetsfan (Mar 20, 2015)

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## jetsfan (Mar 20, 2015)

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## gladaki (Feb 23, 2014)

jetsfan said:


> *Balance Sheet*
> 
> _Short-term Assets_
> 
> ...


I am curious
How much downpayment you did for the house ?
5% ?
whats interest rate ?
If interest rate is too low then why doubling the payment ?
cant this money can be invested in market for 6+% return


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## jetsfan (Mar 20, 2015)

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## My Own Advisor (Sep 24, 2012)

XIC YTD returns as of July 28th are -2.2%.

So, you can't always get 6+% return. Long-term, over years and decades, yes, but not YTD. Anyone doubling up on their mortgage since January 2015 would have had a better rate of return.

The lesson I believe is killing debt is always a good move regardless of what you think the market will do.


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## My Own Advisor (Sep 24, 2012)

@jetsfan

Good work to date! Kudos to your focus on investing in your late-20s.

Those pensions will be your financial backbone as you get older. 

Continue to save in your TFSA and kill your mortgage and rinse and repeat for the coming decade. You'll be well-set for a great financial future.


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## Bobbyjohn (Jul 28, 2015)

**

That's awesome. I wish you the best of luck and hope you obtain what you set out to!


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## nobleea (Oct 11, 2013)

jetsfan said:


> Based on feedback from this thread, we reduced the amount we planned to prepay towards the mortgage. We did do a 5% downpayment @ 2.94% for 5 years. Since the end of June we've been making just the regular mortgage payment, and we started a coach-potato based portfolio with the cash we planned to dump in the mortgage. Going forward we will build up this portfolio over the next 5 years and decide how to proceed when it comes to mortgage renewal.


I think paying down debt is a great idea. Despite what many people think, you don't get a return equal to your current mortgage rate. You get a return equal to the average rate of your mortgage from now until the time it's paid off. Since rates are at historical lows, unless you are going to fully pay it off this term, that is likely to be a higher average rate than your current rate.


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## jetsfan (Mar 20, 2015)

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## cashinstinct (Apr 4, 2009)

Good to have balance between different objectives, and have both partners agree on the strategy.

You are in the right direction :biggrin:


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## jetsfan (Mar 20, 2015)

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## jetsfan (Mar 20, 2015)

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## jetsfan (Mar 20, 2015)

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