# My Financial awareness journey



## Lifefunder (Mar 1, 2012)

I always wondered if it was ever too late to plan for your or your children's future. I know that any money saved is still money saved but at what point does quality of life suffer by trying to save for yours or your families future ?

I have co-workers in their 40's who have never started an RRSP and have never contributed to our company share ownership plan and have no savings and also have 3 kids. I just want to make sure my wife and I can retire by 65 and my child(ren) are taken care of are given a fair shot at life.

I feel as though I am starting to smarten up with my financial responsibilities and life is quite stable at the moment. The only problem is the lack of any net worth and the always living paycheck to paycheck.

I signed up here to get a little bit of advice on just how to begin. So far I have only $7K saved in my company share ownership plan and I have just begun my TFSA with CIBC which has $500 in it. I am setting up an RESP this weekend for my daughter who is 2 years old but will set it up as a family plan as I will most likely be having a second child in the future.

I currently am 28 years old and my wife is 33. Together we make $96,000 gross salary in stable companies. We own a new condo which is worth approximately $210,000. We have no vehicle debt and I have a small personal loan for $8000. I also have one credit card with a balance of $1800. 

I also have an old locked in pension from a previous company worth about $3k that I was planning on putting into some type of LIF I think. 

Sorry for the novel of a post but where do I begin at this time ? I also want to set up an emergency fund as well but have not done so. Of course any more money squirreled away will result in a lifestyle change (no more Vegas trips for a while ).


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## GOB (Feb 15, 2011)

$96,000 and owning your condo and vehicle should allow to save a significant amount while still living a good life with a few vacations and discretionary expenditures. What's your current savings rate? Without knowing the details of your expenses, I would say you should be able to save at least $25,000 - $30,000 a year.


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## the-royal-mail (Dec 11, 2009)

Welcome. Good post.

I think you have a lot of financial work ahead of you. The first priority before investing in any type of RESP needs to be paying off ALL your debt. Second, establish an emergency fund to protect you and your family during adversity. All of you still need basic things like clothing and food no matter what, and the bills need to continue to be paid. An emergency fund, held in cash (not invested in equities) is a good goal to have for most people. 6-12 months of living expenses should be the minimum goal for tier 1. More details in my sig file. TFSA is a good place to store this money for now.

To me, these are all the basic foundations to give you and your family solid financial footing. These things will take a bit of time and it is my opinion that RESPs, RRSPs and the like be put on the back burner while you build your foundation. You also need to save for the arrival of future child.

These are my opinions of course but I think you'll be busy saving this way for a few years. Lifestyle changes are definitely in order to control desires and spending. Sorry to be blunt.


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## piano mom (Jan 18, 2012)

It's great that you're wanting to be more responsible with your money. You are only 28 and you have a great household income. In my opinion, with a little dicipline and drive, you can easily reach your financial goal. Just keep reading this forum for advice


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## Maybe Later (Feb 19, 2011)

First, welcome to the forum. 

Second, please realize that there is no one-size-fits-all solution. Apart from mentioning an RESP, which indicates you'd like to help your child(ren) with their education, what else is important to you? Retirement? Travel? Community Service?

After that, I'd try and recognize where your money is spent and whether it is in line with your goals. Money isn't a scorecard, it's a tool to be used to have the life you want, now and in the future.

Since you have a family, I'd also be looking into other long term eventualities - are you and your wife adequately protected in case of job loss, injury, disability or death. An emergency fund may be part of this, but work benefits, insurance and wills also should be looked at.

If you're meeting all your obligations and have begun to save you don't need to feel rushed into any one saving and investment strategy. I have my own plan, but you need to develop comfort with where your money will go.

Finally, take everything here, my own advice included, with a grain of salt. I don't agree with some of the posts above:

Without knowing how your income is allocated between you and your spouse, where you live and what your other obligations are how can anyone come up with a number to save? It may be very different if you live in Vancouver compared to Charlottetown. Perhaps a member of your family has an expensive medical condition, or you support an aging parent or have other expenses.

Also, certainly have a plan for debt reduction, but look at the big picture - and figure out how to run the math around savings and investing if you don't already. Lets make the assumption you could pay off your consumer debt in two years. It may be worthwhile to have $$ in the RESP, with a 20% government grant, for two years extra, rather than wait until the debt is completely resolved because it will compound for another dozen or more years after that. 

Without knowing more, you should look at any blanket statement critically, apply it to your own situation and then realize that part of it is about the numbers, but a lot of it also comes down to your own comfort and security.

Best of luck! Ask lots of questions, there are some very knowledgeable folks here. I'm constantly learning.


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## SlowandSteady60 (Feb 19, 2012)

Hi and welcome.
First of all, there have been good points brought out in the posts above and I can only speak from experience but here are a few that worked for us.
1) Pay off the plastic - the interest incurred on these cards is large. Ask yourself one important question when using those cards-"Do I really need this" If the answer is no, put it back.
2) Pay off your car - This is the biggest liability when it comes to accumulating wealth that there is. Remember, it is only to get you from point A to point B in a safe manner. If it's used as a status symbol, which it often is, you probably don't need it.
3) Pay off any other outstanding bills
Now you're ready to save money.
4) Do they still have some form of baby bonus? If so, stuff it into a RESP every month and forget you ever saw it. It paid for both our boys College funds. 
If you don't know how to direct invest, get a good advisor to take care of your money for now. 
5) Put away an emergency fund. Use your TFSA if you have one. It's liquid and you can monitor it. Try to put away about six months worth of savings.
Minimum of about two months
6) Obtain the lowest mortgage rate you can on your house
7) Shop around for insurance coverage
8) Live within your means. Keeping up with the Jones' usually keeps people poor and in the divorce courts
9) Save as much money as you can and have some fun along the way.
10) Build a budget. There are several good worksheets on the Internet. Fill it out religiously and then tweek it to fit your needs. Monitoring it will tell you exactly where you're wasting money. You will find lots of extra cash at the end of the month. Stick to it! 
11) Pay yourself first. Never got this when I was younger. Put away 10-15% of your wages before everything else. This is your nestegg if all else fails.
Good luck to you. Hope some of this helps


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