Name: Will and Jenn
Age: 31 and 30
Combined annual income: $ 160,000
Debt: $ 255,000 mortgage
What theyre doing: Army officer and mechanical engineer
Where they live: Ottawa
Main financial concern: “We just doubled our mortgage payments … We aim to be debt free.”
“There’s an old story about a guy taking a cigarette break with his non-smoking friend,” says Will, an Ottawa-based military officer. “He told the guy if he didn’t smoke he could invest that money and have a Ferrari when he retires.”
Although neither smokes, it’s a story that Will and his wife Jenn took to heart. “We set aside $ 144 per month – the equivalent of 14 packs of cigarettes,” he says, in a “Ferrari” fund. “When we retire, we will have enough money for a Ferrari.”
Will and Jenn’s approach to regulated savings extends to all facets of their lives. They adopted the envelope method, assiduously devoting a sum either in a real envelope, an e-savings account dedicated to each expense: an account for car repairs, one for donations to the church, yet another for vacation.
“For example, we have an envelope at home for a sports fund,” says Will. The $ 1,000 in this envelope will be used to pay for anything sports related, whether it’s a new pair of running shoes, curling fees, ultimate Frisbee or triathlon registrations.
“When you are in debt, you are a slave to the lender,” Will says. “When I need the money, the money is always there.”
It hasn’t always been that way. Will admits that after he and his wife graduated from the University of Ottawa and got married in 2014, they moved for military training in New Brunswick, Quebec and Alberta without really caring. of their finances.
“The money came in and the money came out – we actually didn’t know where our money was,” he says. But family members got the couple hooked on budget guru Dave Ramsey, and it changed their mindsets. The couple was able to repay $ 45,000 in student loans – from the Ontario Student Assistance Program, a private loan and a line of credit – as well as a new car, in two years.
Since then, budgeting has become an integral part of their lives. Will has access to an investment advisor through his military benefits program, investing his tax-free savings account funds, approximately $ 32,000, and money from his registered retirement savings plan, approximately 37 $ 000, in a mutual fund.
He has $ 17,000 in a variety of savings accounts or electronic envelopes, and $ 7,000 in sinking funds, which he replenishes as he depletes them. Unlike an emergency fund, which is used to cover unforeseen expenses such as those caused by job loss, a sinking fund pays for things you buy all the time, like gardening supplies or tires. new.
Because they rarely eat out, the pandemic hasn’t had a big impact on their finances, Will says. The couple spends $ 350 a month on groceries and almost nothing on alcohol. “We make our own wine and our own beer,” he says.
In fact, over the past year or so, he and his wife have spent their Friday evenings driving for the Skip the Dishes food delivery service, extra work that has earned them money for their own meals at to take with.
In a few years, the couple plans to start a family. They want to pay off their remaining $ 255,000 on their mortgage. In 2019, they bought a 1,200 square foot bungalow on the outskirts of Ottawa for $ 394,000 and recently doubled their mortgage payments to $ 3,030 per month.
They would also like to travel to Hawaii – a trip that has been derailed by the pandemic. And they plan to continue giving to their church.
Later, they plan to buy another property. “We would also like to buy a cottage, but not before the primary residence is paid off,” Will says. “We aim to be debt free. “
Their typical monthly expenses:
$ 3,030 on a mortgage. “We bought our house in 2019. It is a 1,200 sq.ft. detached. bungalow. We just doubled our mortgage payments on this.
$ 200 on utilities.
$ 300 gas.
$ 358 on home / auto insurance. “We’re with Johnson Insurance – it’s a house and two vehicle package.”
$ 144 to the Ferrari fund. “The plan would be to buy a used one, for sure, [around] the $ 100,000 mark. We are investing the money, so $ 144 per month at an annualized rate of 6% – relatively small compared to the investments we actually have – would be roughly $ 100,000 exactly in 25 years.
$ 1,150 to a TFSA. “Right now, all of our retirement savings go into the TFSA.
$ 860 tithe to their church.
$ 82 for charities. “We sponsor children through the Compassion International program,” which supports children in developing countries.
$ 400 on an automobile fund. “We use this fund for auto repairs. I commute, but my wife works from home. We have two cars – both are paid for. I have a 2008 Acura RDX. We bought the second car – a 2015 Sonata – on March 12 of last year, so we would have a newer, fuel efficient car. Then the pandemic struck.
$ 280 on property tax.
$ 50 on the hospitality fund.
$ 200 on the renovation fund.
$ 350 on the grocery store. ” We eat well. We buy generic groceries from Superstore. We love the classics: pork chops and potatoes.
25 $ on wine / beer. “We make our own beer and our own wine. I’m going to spend $ 50 on a wine kit and get 25 bottles out of it. I can also buy a few big boys a few times a month.
$ 350 gas.
$ 150 about sport. “I am in the gym five days a week. We love biking, running, ultimate frisbee, curling. We do two or three races a year – some are winter triathlons or the Ottawa Winterlude.
$ 50 while eating at a restaurant. “We started driving for Skip the Dishes – if we want to eat out, we have to earn it. We do one shift per week. It’s $ 100 on a Friday night for four hours. In terms of take out, it’s mostly about ordering pizza or going out for wings.
$ 50 on cell phone. “We are with Cityfone. We had to buy our own phones.
$ 125 on the Internet.
11 $ on Netflix.
23 $ on applications. “We have Sirius XM.”
$ 60 on the clothes. “We take that in cash in an envelope – if we need socks or a coat. We don’t spend too much on it. We have a fairly large outlet 20 minutes away. We also have quite a few things at Costco.
$ 150 on miscellaneous items. “It could be a beer kit or a coffee at McDonald’s.”
25 $ on their pet, a mixed breed dog. “Sandy is almost seven years old, a rescue dog from Saskatchewan. The $ 25 we set aside each month covers his food and injections when they come due. It also has its own envelope.
$ 50 about gifts.
$ 250 on holiday. “We went skiing three weeks ago – it was $ 150. We had booked plane tickets for March 17th of last year to Hawaii. We were able to get refunds.
The name and some details may have been changed to protect the privacy of those profiled. We would like to thank this couple for sharing their story.
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