Reader Case Study: Canadian Family Plans For The Future (and yes, hockey is involved)

Beth and Brad live north of Toronto, Ontario with their young daughter and old cat. With retirement 15 years away for Brad, the family wants to better prepare and get a handle on their approach to money. Brad and Beth were a money mismatch from the start, but after 14 years of marriage, they’ve been able to find a path forward together.

Unrelated Update: I’m doing a Facebook Live thing tomorrow with Brad from ChooseFI. If you’d like to join us, here are the details: Saturday, July 18, 2020 at 2pm ET; you can access this free event here. Best things about this? It’s free, it’s online, and it’s (hopefully) during my kids’ nap time (TBD on that last one).

What’s a Reader Case Study?

Case Studies address financial and life dilemmas that readers of Frugalwoods send to me requesting advice. Then, we (that’d be me and YOU, dear reader) read through their situation and provide advice, encouragement, insight, and feedback in the comments section. For an example, check out last month’s case study. Case Studies are updated by participants (at the end of the post) several months after the Case is featured. Visit this page for links to all updated Case Studies.

I probably don’t need to say the following because you folks are the kindest, most polite commenters on the internet, but please note that Frugalwoods is a judgement-free zone where we endeavor to help one another, not condemn.

And a disclaimer that I am not a trained financial professional and I encourage people not to make serious financial decisions based solely on what one person on the internet advises. I encourage everyone to do their own research to determine the best course of action for their finances. I am not a financial advisor and I am not your financial advisor.

With that I’ll let Beth, this month’s Case Study subject, take it from here!

Beth’s Story

Kiwi the cat

Hello! I’m Beth, I’m 42 and I’m married to my wonderful husband, Brad, who turns 50 in September. We have one amazing kiddo, Emma, who is 9 ½ (the ½ is a big deal these days!). We live north of Toronto, Ontario–in a town called Newmarket–and we’ve been here for 11 years.

My husband works for American Greetings and celebrated 25 years at the company last month! I work for a Toronto-based HR software company – 8 years and counting. We’ve been married for 14 years and together for 16 years. We have one cat, Kiwi, who is 15 years old, and enjoys being the ‘baby’ of the house.

Beth’s Career

Beth’s garden

I am very lucky to work from home (and have done so for the last several years) so having to WFH during the pandemic was very easy for me. When my daughter is in school, her morning and afternoon schedule are my responsibility. I am very lucky to be able to walk her to school and pick her up most days. We only live 750m from her public school, so we were allowing her to walk home alone some days to help build independence. This flexibility is one of the best parts of my job!

My overall career has been interesting. I’ve been laid off 3 times in 11 years and, while I know it’s not because of my performance, as I’m awarded Top Performance awards etc., it’s also difficult to reinvent oneself each time. I used to work in downtown Toronto and the train ride was 3 hours each day, which was exhausting. My first layoff was 3 days after we bought our home – talk about out of the blue! However, I was very lucky to get a job with the ‘competitor’ one week after we were all termed (our company went out of business). My 2nd layoff was when I was 3 months into my maternity leave. It meant that after I finished my maternity leave, I had no job to go back to, but it also meant that I didn’t qualify for Employment Insurance if I didn’t find a job. To say it was stressful is an understatement. As I knew I didn’t want to take the train or work in the city, I found a job 40 minutes from my house working as a sales coordinator for a Human Capital Management company. About a year in, I moved to a new role within HR as an Onboarding program coordinator.

A couple of years ago I started working more and more from home and that has been my saving grace as it has allowed me to be more active and spend more time with my daughter and take her to her activities. My third lay-off was in February and I pondered taking the severance package my company provided but, in the end, I decided to take another job I was offered within the company. I was lucky to have another job offer within a week of my lay-off, but it was also very hard on me as I’d loved my previous role with the company. I now am a program coordinator.  In some early conversations with my manager this year, I know this role will grow to be more of a program manager, but with the pandemic, things have significantly slowed down.  I am so incredibly grateful to have a job when I know that many don’t.

Beth & Brad’s Money Mismatch

From one of Beth & Brad’s vacations

When I met Brad, he was $15,000 in debt (mostly consumer debt), whereas I had a savings account of nearly $50,000. Talk about oil and water mixing regarding our outlook on money! This has been the one constant issue in our marriage – how we approach money is vastly different. I was so restrictive with my spending when I first met my husband but then would go wild and spend some, followed by incredible guilt. My husband, on the other hand, just went and spent money without batting an eyelash.

I am really proud to say that we’re now on the same page about savings, spending, etc! We’ve always wanted to do an overview of our finances, but I think we were both scared to peel the onion back. I’m so happy to report that doing this Case Study brought us closer together and I feel like we’re now really and truly on the same page. It only took 16 years but, better late than never! I feel incredibly grateful to you, Mrs Frugalwoods, for this opportunity. I’ve never done a deep dive with our financials before and this was the wakeup call we needed. THANK YOU!

Side note: I never thought about money privilege until I read what Mrs. Frugalwoods wrote about what privilege looked like to her: graduating without debt, etc. I want to be clear that I have incredible privilege as I graduated from University without debt (I also worked throughout my 4-year degree but my parents paid about $5k every year for tuition [I’m sure you’re dying that tuition is only $5k!]) and my parents gave us a $50,000 ‘loan’ to buy our first house. We only have to pay it back if we get divorced! We are also able to borrow money with no interest rate, which is an incredible privilege. My parents will ‘give’ us money as my dad says that he wants to see us enjoy their money while he is still alive. Also, my parents contribute $2,500 every year to our daughter’s post-secondary education fund and the government contributes $500. My daughter is their only grandchild and it gives them great joy to fund her education as post-secondary schooling wasn’t an option for either of them when they were younger.

Getting On The Same Financial Page

I always wanted to have more visibility into our finances, but since Brad and I couldn’t agree on things, we just buried our heads in the sand (not smart!). With this Case Study, we’ve had multiple hour-long conversations about our goals, which has been truly amazing! If you knew our money conversations before this, you would be amazed too!

One goal we identified is that we want to update parts of our house. We bought our house in 2009 (literally 3 days before I got laid off due to the financial collapse) for $350,000, which is the best investment we will have ever made as our house is now worth $900,000+. It’s a fixer-upper, but as Mrs. Frugalwoods once said, “I am not my kitchen counter (or was it sink?)” and while I take pride in our house, I have realized it doesn’t need to be perfect! Our first order of business is to finish the bathroom mini-reno that we started before the pandemic (new vanity, floor, mirror, light, paint):  the vanity is only 30” tall and my husband is 6’6 and we feel the height is contributing to his back issues. We’ve budged $2,000 for it and have spent $800 on a vanity so far with $330 for the faucets and another $300 for paint, lights and flooring. We have more plans for updating our house, which I note below.

Being Intentional With Spending

Beth & Brad’s daughter playing hockey

One of our big issues is that we’re not deliberate or intentional with our money. Prior to the pandemic (that’s a phrase I’d never thought I’d say!) we spent money whenever we needed something. I feel terrible writing this but, one of the good parts of this pandemic is that we’ve been able to save lots of money. We just moved $1,500 to our emergency fund because it feels like NOTHING is safe right now!

Last year we were so unintentional about our money – here’s what we spent on the big things I can remember:

  • New Mac computer for me: $1,800
  • New washer and dryer: $1,800 (we stack our washer and dryer, so when the washer broke, we had to replace both – next time it goes down, I’m redesigning my laundry space!)
  • Eavestrough + soffit replacement on the exterior of the house: $5,500 (we borrowed $2,500 from Brad’s mom to pay towards this so we didn’t have to dip into our savings!)
  • Trip to Scotland for a family reunion: $5,000
  • New basement door: $1,400

I think something contributing to this spending is that Brad travels to a new location for work every day, which makes it hard to have a shared daily schedule. When our daughter is in school, the morning and afternoon schedule is totally up to me. I crave structure but am terrible at self-accountability. Anyone want to be my accountability partner, lol?

Beth and Brad’s Hobbies

My husband’s hobby is playing video games! The best anniversary present I ever bought him (we don’t do presents anymore) were gaming headphones so I don’t have to hear all the noises! I know, so romantic, eh? It’s taken me a long time to feel ok with this hobby, but he spends his whole day out in public dealing with folks and he just wants to come home and do something mindless every once in a while. He’s also a big plane watcher and one of his dreams is to go to this place in the UK where you can see fighter jets do maneuvers through the hills. I remember the first time he looked up at the sky and told me, “there’s a DC10 with hush kits” – I remember thinking what in the heck is he talking about?! Now my whole family is involved in pointing out planes and quizzing him! (Not that we would know any different!).

Sign made by Beth!

My hobbies are a bit different. Currently I’m obsessed with making signs (see photos) and I’ve always wondered if I could turn my hobby into a small side-hustle but not sure if I have the confidence or fortitude to do so!  I took my daughter’s old nursery and turned it into my craft room, so it is full of all different types of craft supplies from making cards to sewing to knitting/crocheting to whatever else I’ve bought from Michaels. I enjoy spending the time to see what I can create and I’m learning that it doesn’t have to be perfect to be great!

Brad and I enjoy the simple life. We like spending time with our friends having potlucks and BBQs. I enjoy reading and Brad likes watching movies and tv shows. We enjoy spending time at my parents’ vacation cottage doing projects and enjoying family and friends. Over the last couple of years, I have invested time and effort into creating gardens. This year I’m growing green bell peppers, tomatoes, scarlet runner beans, spaghetti squash, asparagus, cabbage, lettuce and cauliflower. I enjoy the physical work as well as the meditative actions of watering and weeding!

We are also a hockey family – I mean, can we be any more Canadian, eh?!! Lol….  Our daughter started playing ringette when she was 4 and switched to hockey at age 6. This year, she played house league and was an alternate player for the Novice girls rep team. This meant she played on two teams, but didn’t always play games for the rep team. We spent a lot of time at the rink this year cheering her on and I also volunteered as a trainer on both teams, so I had to be at practice + games to support the girls. I love being involved in my daughter’s hockey life and I really enjoy getting to know her friends, the parents, and the coaching staff. Brad and I didn’t play competitive sports outside of school, so this is a whole new world for us. It’s expensive, but we consider it an investment in so many things: friendship, teamwork, self-control, agility, diligence, and more which we feel are great life lessons. Our daughter LOVES playing hockey and she really enjoys spending time with other girls her own age. She’s an only child and she really enjoys the camaraderie.

Where Beth and Brad Want To Be in Ten Years:

1)    Finances:

  • Pay off our mortgage before retirement.  We’re on track to pay it off in 15 years, which would be around the age my husband retires.
  • Top up TFSA + our RRSPs. We can contribute $5,500 every year to TFSA and 18% of our income to RRSP. We are nowhere near contributing either of these amounts.
  • Contribute to the maintenance of my parent’s vacation cottage with the end goal of assuming responsibility for the cottage along with my sister.
  • Have money set aside for trips to Scotland/England to see family (I’m ½ Scottish).

Beth and Brad’s Christmas cat

2)    Lifestyle:

  • We enjoy the simple life. I’m happy with our house – it needs some work, but I’ve realized in the last 6 months that my house doesn’t have to be perfect. It’s not as if we have top furniture (one of our couches is 40 years old: hello hand-me-downs!), but I like everything to have its place and I take pride in my home. Thanks to our conversations for this Case Study, Brad and I have listed our priorities:
    • Add a front screen/glass door (to allow for cross breeze): $1,000
    • Replace front siding: $1,500
    • Mini kitchen reno: $2,000
    • Replace windows $8,000
  • I want to be able to afford these renovations without wondering how I’m going to pay for them. I refuse to get a line of credit, although we do have the privilege of being able to borrow from our parents.
  • I want to be healthy. I have Type 2 diabetes and during the pandemic, my sugar levels are high so I’m trying to lower them via diet, exercise and drugs. I’m lucky that we both have drug coverage, so our prescription costs are zero for the most part.  I’m too young to be on meds for it and am working towards trying to reduce my medications and to eventually stop taking them.

3)    Career:

  • I want to be doing a job that I love where I can help people. I’m not 100% sure if I want to be in management and am open to new ideas. I’m a hard worker and enjoy learning new things so I’m open to different opportunities. That’s one of the great things about my company: people have been with them for 30+ years in different roles, so I think that will be my path.
  • Brad loves his job. He’s been with his company for 25 years – 30 if you count part-time. He was in the same job for 24 years until this past February where he went out of his comfort zone and became a Territory Sales Manager for a maternity leave.  We were excited for him to get bonus but unfortunately with all the craziness, there are no financial goals this year and so no bonus for anyone. He did negotiate a raise, which he will be able to keep when he goes back to his former role (Installation Manager). He enjoys his job and travels to a new destination every day and will be happy if he can continue doing this job for the next 15 years.

Beth & Brad’s Finances

Income

Item Amount Notes
Beth’s income $3,794 Beth’s net salary, minus the following deductions: 1% stock purchase plan, taxes, 4% pension plan with 4% match, and $30 per directed towards my company’s charity
Brad’s income $2,800 Brad’s net salary, minus the following deductions: health & dental insurance, company car usage, 4% pension plan contributions + 4% match, and taxes
Child benefit $133 Taxable income, automatically given by the Canadian Government
Monthly subtotal: $6,727
Annual total: $80,724

Expenses

Item Amount Notes
Mortgage $1,200 We pay an extra $100 a month towards the principal.
Groceries $800 Includes household supplies (such as toilet paper, laundry detergent – basically trips to Costco!). We have been spending more due to pandemic!!
Property Taxes $385 Current monthly price, we pay in 10 month installments and will be re-adjusted in July for 2nd half of year
Rogers bill $158 Includes high speed wireless, phone and tv.
Dinners out $150 We typically go out for dinner once per month and get take-out once per month.
Hydro Bill $130 We converted to low flush toilets a couple of years ago and it made a difference. Now I wash our dishes on ‘fast wash’ 30 mins compared to 2 hours on normal/sanitize.
Brad’s monthly fun money $120
Beth’s monthly fun money $120
House Insurance $117 With TD Insurance. Every year I call and negotiate the rate for both house and auto.
Car Insurance $112 With TD Insurance. I tried to negotiate this year and even got a new provider but my husband has a speeding ticket on his account  that is affecting his rating!
Gas $100 Varies depending on how much heat we use plus we have gas stove + fireplace
Christmas gifts $100 We don’t give presents to my brother-in-law or his wife except baking + wine. We give about $100 each to my sister, parents, and each other… and we go totally overkill on our daughter. Probably around $400 each Christmas! I KNOW!!!!!! I’m dying with the realization that we spend A LOT of money on our child.
Vacation $100 We typically go to Outer Banks, NC for 1 week in March with my extended family. My parents pay for the rental and we pay for food/drinks. We drive down and pay for gas/hotel stay on the way down.  We would like to have a dedicated vacation fund.
Beth & Brad’s Life Insurance $84 With Empire Insurance. I have a pre-existing medical condition so I had to locked in extra coverage before it went sky high
Cat food + litter $60
Gas for my car $50 Small tank and I don’t do a lot of driving except to hockey rinks!  Lol….but I’m still on a tank of gas right now from March!
Emma’s birthday $50 I typically host a bday party for Emma and I have brought it in for $250 including loot bags for 10 kids but this year we decided to do an adventure and went to Great Wolf Lodge. It was expensive but so glad we did it in light of the pandemic. She still talks about it all the time.
Miscellaneous $50 This is a catch-all because I’m sure there’s areas that I haven’t covered. The past 3 months haven’t been normal spending so I tried to go back and look but it’s difficult. According to my credit card app, from May 2019 to May 2020 I’ve spent $21,318! OMG! There were flights on there but still!
Web TV $40 Our Rogers TV only gives us basic cable so it’s cheaper to go with this web TV. I don’t watch TV that often but my husband enjoys it.
Beth’s Life Insurance $35 With Empire Insurance. I have a pre-existing medical condition so I had to lock in extra coverage before it went sky high
Clothing $30 Clothing for all 3 of us. I use my PC points to buy clothing from Joe Fresh for both Emma & I.
Haircuts $30 My husband gets a haircut every month and Emma gets cheap haircuts 2-3 times per year. I gave up on dying my hair cause 1) too expensive and b) I’m enjoying my grey 😉
Birthday gifts $25 We don’t really give presents to each other anymore and try instead to do experiences. Although I still give to my sister, Brad’s parents, my parents, our niece and nephew. Plus any birthday parties Emma is invited to. Going rate is $25 – $30 for a present!
Car expenses $20 License renewal + saving for repairs.
Craft supplies $20
David Suzuki Foundation charitable donation $12 We got married on earth day so this is an important charity for us!
DietDoctor.com $11 I try to eat low carb and follow dietdoctor.com website for recipe + health info.
Sirius Sat. radio $11 My husband’s territory has places with no radio (or worse, EZrock!)
PC Express $10 $125 per year – allows me to do online ordering and pick up. Non-negotiable as I hate grocery shopping!  I also spend less because no impulse purchasing!
Charitable giving $10 In addition to the 2 monthly charities I donate to, we also like to give to other charities in an ad-hoc manner. We just gave money to the food bank in light of covid.
Fit4Less $10 Gym membership for my husband
Amazon Prime $8 $90 per year
PS4 online access $7 In order to game online with friends for both my husband and daughter
Winter gear $7 Winter gear for Emma
Disney+ $7 We pay for Disney+, my sister pays for NetFlix and friends pay for BritBox and we all share passwords
Monthly subtotal: $4,178
Annual total: $50,136

Notes: I’m looking over our expenses and whoa! Some of those columns are incredibly uncomfortable to look at! There’s a lot of room for opportunity to change things! I want to list out the following for some context:

  • Brad and I both have company cell phones – very thankful!
  • We don’t drink coffee and therefore don’t go to coffee shops or grab a Timmies very often.
  • I hang dry all our clothes, so we reduce our hydro bill and reduce our carbon footprint
  • We keep the heat at 19 and AC at 25.  Grab a sweater or a popsicle depending on the season if you’re cold or hot!
  • Conserving our hydro and gas is important to me from an environmental + frugal perspective.

Mortgage Details

Item Outstanding loan balance  Interest Rate Equity (amount you’ve paid off) Purchase price and year
Mortgage on primary residence $158,562 2.49%, 5-year fixed rate, due in October 2020. I used to work at a mortgage company and still get staff rates! Woot! $191,438 $350k; purchased in 2009

Debts

Item Outstanding loan balance Interest Rate Loan Period/Payoff Terms/Your monthly required payment
Loan from Brad’s parents $2,500 0% interest There are no terms and my MIL is not requesting payment any time soon

Assets

Item Amount Notes Interest/Bank/Type of securities held
Brad’s Pension Plan $94,546 As of 12/31/2019 It has a 6% return rate since his first contribution in 2006. Via Manulife
Beth’s Pension Plan $66,602 As of 6/10/2020 I have a Pension Plan (rate of return 7%) plus RRSP plan (rate of return 6.99%). Via Great West Life (Canada Life now)
Emma’s post-secondary fund $27,332 My parents contribute $2,500 every year and the government contributes $500. It’s lost 10% due to Covid It is handled by my parents
Brad’s RRSP $20,710 $100 monthly contribution Granite Growth fund with SunLife Financial
Beth’s RRSP $18,054 $50 bi-weekly contribution Granite balanced growth with SunLife Financial
Emergency Fund $9,591 Needs to be more! TFSA account (tax free) with 0.25% interest with Tangerine
Beth’s saving account $6,430 This is my savings account from my bonus, Christmas & birthday money.  I’m probably will use this to buy a new-to-me car. It doesn’t have to be fancy, just has to get me around town 🙂 Earns 0.25% interest (OMG) with Tangerine
Stock Equity Award $4,000 This is in US dollars and I was just awarded it last week so I have no idea how it works! They expire in 10 years. Stock Equity plus
Emma’s savings account $3,968 We contribute $25 every 2 weeks to a savings account for her. Savings account with 0.35% interest from Tangerine
Joint no-fee chequing account $3,950 Our daily chequing account Simplii Financial
Emma’s camp fund $3,347 We contribute $100 every 2 weeks so we can pay for summer camps and hockey and it’s still not enough!  If she makes rep hockey next year, we’re looking at $2,500 – $4,000.  This account has a $2k gift from my parents who gave us money this year for her to go to overnight camp (it’s $2,500 for 2 weeks) but camp is cancelled. Plus we need about 5 weeks of day camp each year which is about $1,500. This year is a gift because we will save money with no camps but the mental stress is not worth the extra money some days! Savings account with 0.25% interest from Tangerine
Brad’s no-fee chequing account $1,975 Brad’s savings account Simplii Financial
Brad’s TFSA $882 $100 monthly contribution Earns 0.25% interest with Tangerine
Beth’s no-fee chequing account $630 This account receives any payments from the government (tax rebates, child benefit) Simplii Financial
Total: $262,016

Vehicles

Vehicle make, model, year Valued at Mileage Paid off?
Toyota Corolla 2005 $1,500 165,000 KMs 🙂 Yes. My husband has a company car for which he ‘pays’ $100 a month and it’s also a taxable benefit.

Credit Cards

Card Name Rewards Type? Bank/card company
Tangerine World Mastercard Cash back Tangerine
PC Financial World Elite MasterCard PC Points MasterCard / PC Financial
Scene Visa Scene Points (to be used for free movies at Cineplex movie theatres) Scotiabank
Airmiles MasterCard Airmiles program BMO Bank of Montreal
Costco Mastercard Costco cashback! We live 1km from Costco – can be dangerous! Capital One

Beth’s Questions For You:

1) What credit card should I be using? 

  • I’m using PC Financial World MasterCard Elite which gives me great PC points (and allows me to buy clothes for free using my points) but they don’t allow you to import your data into Mint. I use their app, but it’s hard to use as I can’t drill down to see details. I also have a Tangerine MasterCard.
  • My husband uses Scotiabank Scene Visa, AMEX, Bank of Montreal Airmiles Mastercard and Capital One Costco MasterCard.
  • I think we need to stick to two cards and use them exclusively.

2) Are we on track for retirement? (I know we’re not, but I want to know what we need to do to get up-to-speed). 

  • I fully expect – and my husband agrees – that he will work until he is 65 (or older) and hopefully I can retire by 60/62 as he’s 8 years older than me. Our retirement plans consist of travelling to New Zealand, the UK and through Canada and the US.
  • My parents have a cottage and we have expressed an interest in using/managing/buying when we’re older – it would be a co-share agreement with my sister – and we would like to spend time at the cottage as our best friends have the cottage right beside us.

3) What financial management software should I be using? 

  • Personal Capital doesn’t work here in Canada so I’m using Mint, but find it difficult. Should I move to Quicken? Or YNAB? I don’t want to get obsessed with my money, but I think a weekly check-in would help us be more intentional. When I get obsessed with money, I don’t want to spend ANY OF IT and then when I do spend it, I go a little crazy!
  • I don’t think either of us are going to make big bucks in the future, so it’s a matter of wealth protection for us. How do we use what we have in a responsible, intentional manner and spend and save wisely?

4) Currently Brad and I give each other $120 per month as ‘play money’. Is this the right approach? Should we increase or decrease the amount?

  • This money can be spent on anything we want, and we don’t have to provide commentary or even ask the other for approval to spend it all. In some ways it’s an allowance because it allows us the freedom to have spending money with no constraints.

5) How can we streamline our banking? 

  • It seems very complicated with our multiple savings accounts and chequing accounts.
  • Before the pandemic, we were always in and out of overdraft which costs $5 a month. We have the money, but we’re just not organized enough.

Mrs. Frugalwoods’ Recommendations

Beth and Brad’s daughter playing in the snow

Beth and Brad are going a great job!! Before we dive into Beth’s questions, I want to highlight a few things Beth wrote that underscore why it’s important to know where you stand financially, to have a grasp on all of your accounts and–if you have a partner–to do this work together:

I’m so happy to report that doing this Case Study brought us closer together and I feel like we’re now really and truly on the same page. It only took 16 years but, better late than never! I’ve never done a deep dive with our financials before and this was the wakeup call we needed.

I love that Beth and Brad were able to overcome their longstanding discomfort and conflict around money to have this open, honest conversation.

When you approach money conversations from the standpoint of curiosity and gathering information, it allows both partners to feel validated and able to ask questions and share concerns. If you crave this type of money deep-dive, whether on your own or with a partner, you can copy the steps of the Case Studies, follow my free Uber Frugal Week series, or take my full-on Uber Frugal Month program (which is also free).

Ok back to Beth and Brad!

I’m going to start by stating the obvious: Beth and Brad are Canadian. I am not Canadian. Thankfully, I know that many, many, many readers are…. so today is your day! Attention all Canadians: Please offer Beth and Brad Canada-specific advice in the comments today!!!!

Beth’s Question #1: What credit card should I be using?

Since we’ve established that Beth is Canadian and I am not, I can’t suggest specific cards because I’m not familiar with what’s best in Canada. However, I can offer her some general credit card principles to consider:

  1. Pay off your credit cards in full every month: Check! Beth and Brad are already doing this.
  2. Christmas queen!

    Have cards without annual fees UNLESS you reap significant value from an annual fee (usually only travel cards offer enough benefit to offset the fees): Check! Beth and Brad are already doing this.

  3. Make sure you’re actually using the rewards/cash back offered by your credit cards: Check! It appears that Beth and Brad are already doing this.
  4. Keep credit cards open for a long time (and paid off in full every month) because this helps your credit score.
  5. Don’t have too many cards to keep track of because this can lead to underutilizing the points/rewards offered by each card and, more crucially, you might lose track of payments.
  6. Ensure that your credit utilization is appropriate and that you’re not bumping up against your line of credit limit.

The only moderately red flag (a pink flag, maybe) with Beth and Brad’s credit card strategy is that they have a lot of cards. However, if they use the points from all of these cards and if they’re all fee-free and if they pay them all off every month, there’s not really a downside. It sounds like Beth would prefer to simplify and so I suggest they analyze their spending patterns, see which cards are used most often, and assess which points/rewards are consistently used. I’m a big fan of cash back cards because cash is the one reward you are guaranteed to redeem–pandemic or no pandemic!

More about my credit card strategy, and general tips on responsible credit card usage, below:

Beth’s Question #2: Are we on track for retirement? (I know we’re not, but I want to know what we need to do to get up-to-speed).

From my (meagre) understanding of Canadian retirement systems, Beth and Brad should expect to receive income in retirement from the following sources:

  • Canada’s Old Age Security Program (OAS)
  • Their pensions
  • Their RRSPs (Registered Retirement Savings Plans)
  • Brad’s TSFA (Tax-Free Savings Account)

The first part of my answer is to send Beth and Brad back to do more research on their respective pension plans. I don’t know the viability or health of Canadian pension plans, but I do know that some pension plans in the US have defaulted in recent years. I encourage Beth and Brad to find out all they can about their pensions and the likelihood that they’ll pay out.

Determine Their Anticipated Monthly OAS Amounts

Signs made by Beth! I LOVE these

From what I can tell, OAS is available after age 65 and the monthly amount is based on how long you’ve lived in Canada, your marital status, and your income. Beth and Brad can consult this chart and read more about OAS here (source: The Canadian Government).

Once they factor in their anticipated OAS payments, and the specifics of their pension plans, they can determine how much they’ll need to save in their RRSPs. The Canadian Government has this super helpful site, which provides a breakdown on how to plan for retirement. I also found this nifty Canadian Retirement Income Calculator, courtesy again of the Canadian Government. I highly recommend Beth and Brad check this out and plug in their own numbers.

Once Beth and Brad have a good handle on what to except from OAS and their pensions, they can calibrate how much they should be contributing to their RRSPs and TFSA. Beth noted that their max contribution amount is $5,500 per person annually to TFSAs (although, based on my research, I’m pretty sure it’s now $6K in 2020) and 18% of their income to RRSPs.

TFSA versus RRSP?

Hockey!!!!

Canadians, for the love of hockey, PLEASE chime in on this debate in the comments. Here’s my bumbling American attempt at deciphering these two types of accounts. Thankfully, the Ontario Securities Commission has this wonderfully helpful chart comparing the two accounts. The key differences, as I understand them, are as follows:

  • RRSPs are specifically for retirement savings; TFSAs can be used for any type of savings.
  • Contributions to RRSPs are tax-deductible; contributions to TFSAs are not.
  • Given that, you pay taxes on RRSP withdrawals, but you don’t on TFSA withdrawals.
  • You can’t contribute to an RRSP past the age of 71; there’s no age limit on contributions to TFSAs.

These accounts are the inverse of each other in terms of when they’re taxed (similar to American IRAs and Roth IRAs). Given that, their efficacy will be unique to your individual circumstances and–crucially–your tax situation. If you think your tax rate will be HIGHER in retirement, a TFSA will be better; if you think your tax rate will be LOWER in retirement, an RRSP makes more sense. But again, you can use a TFSA for savings other than retirement, so it sounds like a lot of people go ahead and have both.

Bottom Line (please stop talking about Canadian retirement systems, Mrs. Frugalwoods… )

The good news, the easy news, is that this question boils down to a pretty simple solution: if Beth and Brad want to ensure they have more in retirement savings, all they need to do is spend less and save more. Easier said than done, but Beth noted she thinks they have room to reduce their spending. It’s easy to get tangled up in different accounts and strategies and plans and–while it’s imperative to understand the most tax-advantaged ways to save–at the end of the day, it’s just a question of saving more money. Spend less, save more, and invest the difference–that’s about it. Ok, let’s take a look at their expenses!

Beth and Brad’s Expenses

In every Case Study, I like to point out that what you choose to save or not save is a very personal decision. Cutting every last expense is NOT the right answer for everyone and I am NOT an advocate for making yourself miserable in the process of achieving financial stability. I am an advocate for values-based, goal-oriented spending. I think it’s important to assess whether all of your expenses bring you fulfillment and a good return on your investment.

The view from Beth’s parents’ cottage

In order to effectively review your expenses, you need to know what you’re spending. You can write your expenses down in a notebook, you can create your own spending spreadsheets, you can use an online program–whatever you do, keep track of what you spend every month. The reason it’s important to track your expenses every month of every year is that it’s not realistic to assume that what you spent in, say, December 2019 is what you’ll spend every single month of the year.

While some expenses are fixed from month to month (such as rent/mortgage payments), most of us experience fluctuations in lots of other categories, such as: travel, dining out, groceries, healthcare, gifts, entertainment, pets, utilities…. you get the picture. This is why longterm expense tracking is such a crucial element of longterm financial health and planning.

Beth and Brad’s spending isn’t at all unreasonable and it fall well within their means; however, if they want to boost their savings, the quickest way to do that is by spending less money. The other way to do this is, of course, to earn more, but Beth noted that they’re both happy in their jobs (can’t put a price on that!!!) and don’t plan to change careers. Given that, we’ll focus our efforts on finding ways to reduce their spending. Beth also noted that cash flowing their desired home renovations/repairs is a big goal for them.

Here are some ideas for how they can save more money for home renovations and their retirement accounts:

Item Amount Beth’s Notes Mrs. FW’s Notes Proposed New Amount Amount Saved
Mortgage $1,200 We pay an extra $100 a month towards the principal. Since their interest rate is so low, they might consider not bothering with this $100 extra/month payment. $1,100 $100
Groceries $800 Includes household supplies (such as toilet paper, laundry detergent – basically trips to Costco!). We have been spending more due to pandemic!! Could probably be reduced a bit, but this isn’t unreasonable considering it includes household supplies too. $700 $100
Property Taxes $385 Current monthly price, we pay in 10 month installments and will be re-adjusted in July for 2nd half of year Fixed expense; no change $385 $0
Rogers bill $158 Includes high speed wireless, phone and tv. That seems really expensive, but maybe this is standard for Canada? Please advise, Canadian readers.

Combined with their two other TV line items, they’re spending a grand total of $205 per month on TV subscriptions (and phone and internet). That seems like a lot to me, so I wonder if there’s any chance one (or more) of these could be dropped to reduce the overall total? Although I’m also cognizant of the fact that–due to the pandemic–the TV is a pretty great and safe source of entertainment these days.

$158 $0
Dinners out $150 We typically go out for dinner once per month and get take-out once per month. This could be put on hold (or reduced) while they build up their savings. $0 $150
Hydro Bill $130 We converted to low flush toilets a couple of years ago and it made a difference. Now I wash our dishes on ‘fast wash’ 30 mins compared to 2 hours on normal/sanitize. This seems really high, but again, is perhaps standard for their region? Please advise, Canadian readers. $130 $0
Brad’s monthly fun money $120 This is a question of longterm goals. If Beth and Brad want to commit to saving more for their retirement (and shorter-term travel and home renovation goals), this category could be put on hold or reduced $0 $120
Beth’s monthly fun money $120 This is a question of longterm goals. If Beth and Brad want to commit to saving more for their retirement (and shorter-term travel and home renovation goals), this category could be put on hold or reduced $0 $120
House Insurance $117 With TD Insurance. Every year I call and negotiate the rate for both house and auto. This seems really high, but again, is perhaps standard for their region? Please advise, Canadian readers. $117 $0
Car Insurance $112 With TD Insurance. I tried to negotiate this year and even got a new provider but my husband has a speeding ticket on his account  that is affecting his rating! This seems really high, but again, is perhaps standard for their region? Please advise, Canadian readers. $112 $0
Gas $100 Varies depending on how much heat we use plus we have gas stove + fireplace This seems kinda high, but again, is perhaps standard for their region? Please advise, Canadian readers. $100 $0
Christmas gifts $100 We don’t give presents to my brother-in-law or his wife except baking + wine. We give about $100 each to my sister, parents, and each other… and we go totally overkill on our daughter. Probably around $400 each Christmas! I KNOW!!!!!! I’m dying with the realization that we spend A LOT of money on our child. This is a question of longterm goals and is a totally personal choice. This adds up to $1,200 per Christmas and it’ll just be a question for Brad and Beth to grapple with.
One thought I had: Would it be possible to lump in some of their daughter’s hockey equipment and expenses as gifts?
$50 $50
Vacation $100 We typically go to Outer Banks, NC for 1 week in March with my extended family. My parents pay for the rental and we pay for food/drinks. We drive down and pay for gas/hotel stay on the way down.  We would like to have a dedicated vacation fund. Is this on hold due to the pandemic? If so, could this money be saved instead? $0 $100
Beth & Brad’s Life Insurance $84 With Empire Insurance. I have a pre-existing medical condition so I had to locked in extra coverage before it went sky high Fixed expense; no change $84 $0
Cat food + litter $60 I haven’t owned a cat in a looooong time, so I’m not sure if this is reasonable or not? Cat owners, please advise. $60 $0
Gas for my car $50 Small tank and I don’t do a lot of driving except to hockey rinks!  Lol….but I’m still on a tank of gas right now from March! Nice! $50 $0
Emmy’s birthday $50 I typically host a bday party for Emmy and I have brought it in for $250 including loot bags for 10 kids but this year we decided to do an adventure and went to Great Wolf Lodge. It was expensive but so glad we did it in light of the pandemic. She still talks about it all the time. It’s my secret desire to take my kids to Great Wolf Lodge, so I can’t really tell them to cut this… 😉 $50 $0
miscellaneous $50 This is a catch-all because I’m sure there’s areas that I haven’t covered. The past 3 months haven’t been normal spending so I tried to go back and look but it’s difficult. According to my credit card app, from May 2019 to May 2020 I’ve spent $21,318! OMG! There were flights on there but still! I suggest Beth dig in and see what all this is going towards, just to illuminate it for her so she can decide if they’re priorities or not. $50 $0
Web TV $40 Our Rogers TV only gives us basic cable so it’s cheaper to go with this web TV. I don’t watch TV that often but my husband enjoys it. Combined with their two other TV line items, they’re spending a grand total of $205 per month on TV subscriptions (and phone and internet). That seems like a lot to me, so I wonder if there’s any chance one (or more) of these could be dropped to reduce the overall total? Although I’m also cognizant of the fact that–due to the pandemic–the TV is a pretty great and safe source of entertainment these days. $0 $40
Beth’s Life Insurance $35 With Empire Insurance. I have a pre-existing medical condition so I had to lock in extra coverage before it went sky high Is this a second policy for Beth? There’s another one listed above. If so, what’s the rationale for having two? $35 $0
Clothing $30 Clothing for all 3 of us. I use my PC points to buy clothing from Joe Fresh for both Emmy & I. Pretty reasonable in my book. If they want to save more, this could be a space to do so (especially for Beth and Brad since I totally get that kids have this annoying habit of growing… ) $20 $10
Haircuts $30 My husband gets a haircut every month and Emmy gets cheap haircuts 2-3 times per year. I gave up on dying my hair cause 1) too expensive and b) I’m enjoying my grey 😉 Is this something that could be in-sourced? It’s not a ton of money, but could it be an easy way to save an extra $360 per year? $0 $30
Birthday gifts $25 We don’t really give presents to each other anymore and try instead to do experiences. Although I still give to my sister, Brad’s parents, my parents, our niece and nephew. Plus any birthday parties Emmy is invited to. Going rate is $25 – $30 for a present! I wonder if it would be possible to enact the re-gifting/buying new items from garage sales approach for Emmy’s friend’s parties?

Anytime I see a new toy/book/puzzle/craft supply/etc at a garage sale, I snap it up and use it for another kid’s party. I also re-gift new toys that my kids have received and that they already own or aren’t interested in.

$15 $10
Car expenses $20 License renewal + saving for repairs. Fixed expense; no change $20 $0
Craft supplies $20 It sounds like this is an important hobby to Beth and so I wouldn’t advise reducing it. This is where the question of values-based spending comes in. Makes no sense to save all your money if you can’t spend it on the stuff you love! Look to reduce in other less meaningful categories. $20 $0
David Suzuki Foundation charitable donation $12 We got married on earth day so this is an important charity for us! Love this and the personal connection for Beth and Brad $12 $0
DietDoctor.com $11 I try to eat low carb and follow dietdoctor.com website for recipe + health info. If this is working for Beth, then I’d say keep it! $11 $0
Sirius Sat. radio $11 My husband’s territory has places with no radio (or worse, ezrock!) I’m going to push back on this one. I too drive in an area with no cell reception and no radio reception, so what I do is download podcasts ahead of time and listen to them through the bluetooth speaker in my car. This is free with a one-time bluetooth purchase (or his car might already have one!). Is this a possibility for Brad? $0 $11
PC Express $10 $125 per year – allows me to do online ordering and pick up. Non-negotiable as I hate grocery shopping!  I also spend less because no impulse purchasing! I hate shopping too. If this was available where I live, I would totally do this!!! $10 $0
Charitable giving $10 In addition to the 2 monthly charities I donate to, we also like to give to other charities in an ad-hoc manner. We just gave money to the food bank in light of covid. Fixed expense; no change $10 $0
Fit4Less $10 Gym membership for my husband That is one cheap gym membership! Nice!!! $10 $0
Amazon Prime $8 $90 per year I feel like Amazon Prime has become a necessity during the pandemic…. 😉 $8 $0
PS4 online access $7 In order to game online with friends for both my husband and daughter Another question of values-based spending. It sounds like this is an important hobby for Brad and their daughter, so I’d vote to keep it and look to reduce spending in other, less meaningful areas. $7 $0
Winter gear for Emmy $7 Winter gear for Emmy As a fellow tundra-dwelling parent, I want to commend Beth and Brad for getting away with spending so little on winter gear!!!! The struggle is real. $7 $0
Disney+ $7 We pay for Disney+, my sister pays for NetFlix and friends pay for BritBox and we all share passwords Combined with their two other TV line items, they’re spending a grand total of $205 per month on TV subscriptions (and phone and internet). That seems like a lot to me, so I wonder if there’s any chance one (or more) of these could be dropped to reduce the overall total? Although I’m also cognizant of the fact that–due to the pandemic–the TV is a pretty great and safe source of entertainment these days. $7 $0
Monthly subtotal: $4,178 Proposed new monthly subtotal: $3,338 $841
Annual total: $50,136.00 Proposed new annual total: $40,052 $10,092

This spreadsheet gives Beth and Brad a format to work with to see where and how they could save more every month. I’ve made my suggestions above, but they’re the ones who know best where and how they can save. I’ll email this to Beth so that they can tinker with the numbers. If they followed my above ideas, they’d be on track to save an additional $10,092 per year.

Beth’s Question #3: What financial management software should I be using?

Uh, I don’t know. I use and recommend Personal Capital (because it’s free and I like it), but alas, it’s not available in Canada. I’m not a huge fan of paying for financial software, but if Beth feels it would make a marked difference in her life, she should go for it. I know that a lot of people use and love YNAB.

One idea: since Beth and Brad use credit cards for most (all?) of their spending, they could just download those statements to review.

Beth should also check out what the interface is like for their various banks. Some banks do a great job of aggregating your data and providing nice little charts and graphs.

Beth’s Question #4: Currently Brad and I give each other $120 per month as ‘play money’. Is this the right approach? Should we increase or decrease the amount?

The real answer here is that if this works for Brad and Beth, it’s the right approach and the right amount! Finding a way to compromise and agree on money as a couple is crucial. However, this does come to $2,880 per year, which is kind of a lot considering that their hobbies, gifts, dining out, haircuts, and clothes are not included. Reducing (or eliminating) this would obviously save more money, but it’ll be important for Beth and Brad to dig into the reasons why they each value this play money. It might very well be that a smaller amount could serve the same purpose. Or, it might be that $2,880 per year is a very inexpensive way to keep their marriage strong and their finances on track! Sounds like it’s worth another Beth and Brad conversation.

Beth’s Question #5: How can we streamline our banking?

I’m so glad Beth asked this because I was going to say something anyway! Girlfriend, what is going on with all these accounts?! Seven of Beth and Brad’s accounts can’t be combined because they’re specific retirement/savings account programs. Here’s that list:

Item Amount Account Type
Brad’s Pension Plan $94,546 Pension
Beth’s Pension Plan $66,602 Pension
Emmy’s post secondary fund $27,332 College Savings
Brad’s monthly RRSP contribution $20,710 Retirement
Beth’s monthly RRSP contribution $18,054 Retirement
Stock Equity Award $4,000 Stock
Brad’s TFSA $882 TFSA
Total: $232,126

Setting those un-combinable accounts aside, Beth and Brad have seven more savings and checking accounts, as follows:

Item Amount Account Type
Emergency Fund $9,591 Savings
Beth’s saving account $6,430 Savings
Emmy’s savings account $3,968 Savings
Joint no-fee chequing account $3,950 Checking
Emmy’s camp fund $3,347 Savings
Brad’s no-fee chequing account $1,975 Checking
Beth’s no-fee chequing account $630 Checking
Total: $29,890

I commend Beth for carefully setting aside money for different goals and purposes. However, I question if they need seven different accounts to do so? Beth noted that they frequently overdraft one account or the other and then have to pay an overdraft fee. As she mentioned, there’s no reason for her to be doing this since they have enough money to cover their expenses. So, a few ideas:

  1. At the very least, have all of these accounts with the same bank. That way, they could view them through one online interface and transfer money between accounts easily. Maintaining these seven accounts would enable them to keep their savings goals separated, but wouldn’t address the overdraft/confusion issues.
  2. Do the whole “all the same bank” thing AND combine all like accounts. So, all the savings accounts would combine to one and all of the checking accounts would combine to one. With that approach, Beth and Brad would only have nine accounts total–their seven un-combinable accounts, one savings account, and one checking account.

I, personally, am a fan of simplicity and would probably opt to combine all like accounts. However, if Beth feels like that might thwart their savings goals, she should keep separate accounts and find a way to manage them more smoothly. At the very least, I personally prefer to use one financial institution for ALL of our accounts (retirement, 529s, savings, investments, DAF, etc). I use Fidelity for absolutely everything, which allows me to see all of my accounts and my entire net worth in one place. It also makes it supremely easy to transfer money between accounts and to have automated bill pay and automated investments. Fidelity is not paying me to say this, although I really wish they were.

Summary:

  1. Analyze credit card utilization and see if it makes sense to pare down the number of cards they have. Hopefully Canadian readers will offer specific card advice in the comments!
  2. Research retirement accounts: pension, OAS anticipated payments, and determine the most tax-advantaged way to save (referring to the info above on RRSPs vs. TFSAs). Determine how much more they should be saving each month and adjust their spending accordingly (utilizing the spreadsheet format I outlined above).
  3. Have an open, honest conversation about the play money totals and determine the root reason for their need. Discuss if a reduced amount would meet this need.
  4. Work to streamline and simplify accounts. Consider combining like accounts and definitely consider consolidating everything to the same financial institution (if possible). My guess is that combining and simplifying would eliminate the need for any additional financial software. If everything is in the same place, Beth and Brad could probably utilize the bank’s online interface to check-in about their money regularly.
  5. Keep these amazing conversations going! I’m delighted and humbled that this Case Study brought Beth and Brad closer together on their finances. Keep this momentum going by scheduling a regular, repeated money check-in (a lot of couples like weekly or monthly meetings). Keep bringing your open, non-judgmental, loving approach to these conversations and you two will set yourselves–and your daughter–up for a fabulous, well-funded future.

Ok Frugalwoods nation, what advice would you give to Beth? We’ll both reply to comments, so please feel free to ask any clarifying questions!

Would you like your own case study to appear here on Frugalwoods? Email me (mrs@frugalwoods.com) your brief story and we’ll talk.

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91 Responses

  1. Katie Camel says:

    As always, Mrs. Frugalwoods gives great advice. One thought I had was that if you cut some of the things she suggests in order to boost your savings, i.e., restaurant food, limiting fun money and gift spending, etc., would it help you accept these changes if some of that savings was redirected (or at least not eliminated) from your vacation fund? I ask because experiences are so important and give you both something to look forward to and remember. Saving for travel adventures is almost as important to me as my mortgage and retirement, and simultaneously adding to this fund makes me feel good. Cutting other unnecessary expenditures, like meals out, feels painless in return for what I’ll eventually receive. As for the overspending on your daughter, those trips will stay with her forever, unlike the latest, greatest breakable toy or disposable item.

    I can’t speak for you, but my priorities are my home, investments, and travel, so that’s how I balance everything and determine how I want to spend. I try to decide where the reward is greatest. So maybe continue the extra $100 to your mortgage, but redirect your fun money to your retirement accounts – it’s still fun money there, just future fun money! 😉

    As for the $11 diet plan, I’m wondering if there’s a free one? I’ve seen plenty online options, so I’m curious if you can find another or download the plan/ideas for future reference? I’m a nurse, so I understand the importance of maintaining tight control over your blood glucose. But I’m also sure there are free plans because so many can’t afford subscription services. Just another idea – no judgment! 🙂 I LOVE that you share your other streaming accounts with friends! Great idea!

    Other than that, I wish you luck! I love your signs and am sure you could find a way to turn them into a side hustle. Facebook marketplace, maybe? Craigslist? The community probably has better ideas than I do. Is it possible to sell some on Amazon? I don’t know.

    • Beth says:

      Hi Katie, totally agree! We have come to realize that experiences are so much more important than things! I do use dietdoctor.com because the site doesn’t accept any advertising so I feel like I’m getting truthful advice as opposed to someone trying to peddle the latest and greatest advice/gadget/pills, etc! Appreciate the comments 🙂

  2. Shelby says:

    Although they could probably negotiate better deals on TV, phone, internet there is just not the same access to cheap plans in Canada as in USA. As for utilities and insurance spends they are pretty typical. Good job Beth for purchasing 2+ insurance from one provider to get a discount. PS Mrs F you correctly summarized the differences between RRSP and TFSA

    • Beth says:

      Hi Shelby, thanks for posting! Nothing like getting a multi-line discount for insurance! I used to work in Insurance so I know there are savings to be had – you just have to call every year 😉

  3. Tara says:

    I am one for complexity of finances, so I would echo this family’s process for savings accounts. I have multiple savings accounts (that are TITLED for their purpose) but they are in easy banks to use online (Capital One (was ING back in day) and Ally). They also transfer money quickly to my checking (USAA) if a need for quick cash arises. I could see us simplifying to one bank (I’d probably go with Ally) but status quo works for now. I do, however, believe in having separate savings accounts for different goals because as someone who has to do monthly finance reconciliations at work (I work in non-profit development) I really don’t like the idea of tracking different “savings accounts” within one account in an excel spreadsheet. I want to be able to see what I have in my travel account, how much in emergency home repair, how much in cosmetic home repair, etc. in a quick glance. And yes, I do monthly debits to each of these accounts at different amounts (but usually drafted same day all at once) depending on what is a priority (so like the home emergency repair gets more money than home cosmetic repair for instance). Again, I know this may be complicated for a lot of people, but the end result I can see exactly what is in each savings account at once which is simpler for me, and I imagine this family as well. It’s easy to mess up transactions on an excel spreadsheet. but a bank account amount cannot lie!

    We also have lots of credit cards for different purposes (so again, I empathize with these folks, ha!) (lol my husband always asks which card to use…yes complicated) but the reason is cashback varies depending on use (Costco Citi for gas/restaurants usually… but then sometimes Discover has rotating categories type situation). We still use a SW card which at the present seems rather useless, but it’s probably the only airline miles card worth having anymore (so long as SW flies where you want to go) so that’s kind of the catch all card for when there are no good cash-back for the shopping category. Plus, Chase has the best security features of any credit card I’ve owned (my card was copied at a restaurant) so I’m unlikely to stop using that one…and hopefully we’ll want to go on a SW plane maybe next year??? I always want the best cashback option possible, so for me, the complication of multiple cards is worth it in the end (and most are fee-free except the SW). But for folks who can’t keep track, it probably is better to get one all-around card, and the US at least, that usually is either a Costco or Sam’s Club branded credit card (so long as the membership fee is worth it).

    • Quad says:

      Tara – we purchased a cheap label maker & stick the card details, like the extra point categories, directly on to the card! You’ll always know what’s what then.

  4. Sunny says:

    Jeez Louise, kids are expensive.

    Utilities bills do seem high, so maybe invest in some cheap and easy ways to keep your home warmer, or prioritize home improvement projects that would allow for less outgoing money on heating and water.

    • Beth says:

      Hi Sunny, I think our utilities are higher in general because our statements shows our usage as being lower than others in our neighbourhood. My husband can attest that I’m always yelling at him to turn off the water though 😉 When I garden, I have 2 rain barrels that I use but we are in drought conditions right now so I’m having to use water from the hose! Thanks for your response 🙂

      • Wilma Hovius says:

        I don’t find your rates to be high. Canadians spend way more than Americans on many items, including gas, utilities and anything related to screens :). By the way, I was born in Newmarket and grew up in the Holland Marsh (now living in Saskatchewan). Good luck!!

    • Isa says:

      150$/month on Hydro for us. I live in Quebec, Canada. Pretty standard.

  5. Meg says:

    For specific bank account/money advice for Canadians, highly recommend Save Spend Splurge. She has really detailed and direct advice for money and wealth management strategies in Canada.

  6. Elizabeth says:

    Great post! One thing to think about is also the fees charged by some of the funds you are in. I just looked up the Sun Life Granite Growth fund you are in and the fees are 2.35%! That is crazy high and something that will substantially eat away at your returns over time. Do you have any flexibility on switching providers/funds? Something <1% should definitely be possible without too much change (and I know TD, etc offer individual ETFs for more like 0.15%).

    • Beth says:

      Hi Elizabeth, yeah those fees are brutal now that I’m taking another look at it! I need to learn more about ETFs as I know NOTHING! Appreciate the comment! Cheers!

  7. Turia says:

    Yay! A Canadian case study! Greetings from the huge city just south of you down the 404.

    First up, for Mrs. Frugalwoods as well, she overlooked the role of the Canada Pension Plan (CPP) when outlining your income streams in retirement. There are several differences between OAS and CPP : OAS is calculated using a number of factors, including how long you’ve been living in Canada, and what your annual income is in retirement. It starts to be clawed back at certain income levels (which, in my opinion, are ridiculously generous). It is not based on any sort of contributions from your working life – it is effectively free (although I think taxable?) money.

    CPP, on the other hand, is a federal-level pension plan. All workers in Canada (except in Quebec, which has its own plan) pay into the plan a certain percentage of their income up to a maximum amount any given year. The current maximum income level is $58,700: that means that anyone in Canada who earns more than that in a year will ‘max out’ their CPP contributions and will stop having them deducted off their paycheques once they reach it (and then the contributions start again the following year). Your CPP benefits in retirement are based on a very complicated series of calculations including how much you’ve contributed every year. The maximum benefit per month in 2020 is $1,175.83, but most people don’t get the max. You are allowed to cancel out a certain number of low-contribution years if you were the primary caregiver for children. It doesn’t matter how much money you have in retirement – you still get your CPP because you have paid into the plan.

    You can increase your CPP and OAS benefits by delaying your start date (the ‘normal’ start date is when you turn 65 for both). You can also take CPP early (starting from age 60) but you suffer a penalty. There are many many great blog posts out there detailing all of this and discussing the advantages and disadvantages of delaying. There is a survivor’s benefit for CPP, but it’s not great. So if you die early (like my stepfather did), you lose because there’s no way to get back the contributions that you’ve made. But if you live for a long time, you come out way ahead.

    The CPP is sound and in no danger. OAS is essentially a government handout. I’m only a couple of years younger than Beth, and my husband and I don’t count on still having access to OAS when we retire given the challenges of an aging population.

    I had a couple of other thoughts as well:

    The child benefit is no longer taxable. It was taxable under the Conservative government (when everyone got the same amount), but under the Liberals it’s now means tested and tax-free (but, like with OAS, the means-testing is, in my view, ridiculously generous- my household still gets over $1,000/year from the government for our two kids and given our annual income we really should not be getting handouts).

    TFSAs were terribly named. They should have been called Tax-Free Investment Accounts. I noticed that Brad’s TFSA is a savings account, and I think you’re really missing out on an opportunity here to utilize them as another form of retirement planning, because you can hold all kinds of investments in TFSAs – both mine and my husband’s are invested in index funds (TD’s e-series) and we treat them as retirement savings. You can use them for other things, but in my view I’d rather pay the tax on our emergency fund than have such a huge amount of our TFSA contribution room be taken up by something with so little room for growth.

    Income from TFSA does NOT count towards the income level in retirement for OAS clawbacks. It’s not taxable income: you’ve already paid the tax on the contributions and the growth is always tax-free. Honestly, they are a HUGE game changer in the Canadian financial landscape. They’ve been around since 2009 but I feel like they’re still badly misunderstood and under-used.

    I’m wondering why you pay the money for PC Express (I’m assuming you’re part of their Insiders program). We can still shop online for groceries and pick up at the store without being Insiders (we’ve done this exclusively since the pandemic started). Do the program benefits outweigh the cost?

    I agree with you that the PC Mastercard is annoying because it won’t talk to Mint any more. I really love Mint and the way I’ve got around this by only using the PC Mastercard for shopping at Loblaws or Shoppers and then just categorizing the bill as groceries. It’s not perfect, but it works because the rewards are not good enough to use at all other stores (we use the TD Travel Infinite Visa as our main card).

    I think your grocery bill is pretty good- we spend a LOT more than you do (we have one more kid, but still).

    With all the accounts, what about consolidating all the savings accounts into one and keeping a spreadsheet which shows how much in the account is allocated to summer camps, etc.? You could keep the private silly money accounts. We used to do silly money and we found we spent less money when we stopped. Now we just touch base with each other for purchases over $50. Another option would be to keep the silly money but make it include more parts of your overall budget.

    For perspective, Mrs. FW, their house and car insurance look totally reasonable (both are nearly identical to ours), as does their gas and water/electricity (their gas is nearly identical to ours and their combined water/electricity is cheaper than ours). We pay $80/month for high-speed unlimited internet plus another $50 for cellphones (one smart with a data plan, one not).

    Anyway, Beth, I think you’re doing a great job and having the conversations and getting on the same page about saving/spending is such an accomplishment! I hear you about spending too much money on your kid. That’s my weakness too, although I am getting better and moving towards scaling back Christmas and birthdays (and prioritizing experiences not things). We promised to take our eldest to Great Wolf Lodge this year but, well, the pandemic…

    • Turia says:

      For Canadian-specific money blogs, I really like Boomer and Echo: https://boomerandecho.com/ He does a weekly roundup of financial posts on Saturdays, so if you follow him you’ll get introduced to most of the Canadian financial bloggers. It really helps to have a Canadian-specific perspective, especially with retirement planning.

      • Cyndi says:

        Really great advice in Turia’s post!
        I just want to suggest Tech Saavy for internet and Public Mobile for cell phone – they’re both much cheaper than the big companies for the same level of service.
        Also, tangerine cash back mastercard is pretty good, and pretty much the only one we use in our family (same account, but two different cards for my partner and I).
        Also tangerine is a great bank for your RRSP and TFSA investments since their products are lower-fee index funds, rather than high-fee mutual funds offered by TD for example.

      • Robb Engen says:

        Hi Turia, thanks for the mention! Great analysis of Beth’s situation. I agree, they’re in great shape and shouldn’t sweat their expenses as they seem quite reasonable to me.

        Two things I’d also mention: Take a look at the fees you’re paying on your investments. Canadian mutual funds are some of the most expensive in the world, with MERs frequently exceeding 2%. Sun Life notoriously has expensive products on their shelf, so you’ll want to double check the fees on your mutual funds. If possible, switch out of Sun Life and into a robo-advisor like Wealthsimple. They’ll automatically manage and rebalance your investments in a risk-appropriate portfolio of low cost ETFs, for a reasonable management fee of just 0.50%.

        As for streamlining your banking, it’s tough these days as the big banks pay next to nothing on savings accounts, plus they charge ridiculous fees on their investments (mutual funds), so you tend to have to spread your money around to save on fees or get a higher rate of return. One change I’d look into is moving from Tangerine, which really has dropped the ball on their high interest savings accounts, over to EQ Bank. EQ is a digital platform that pays 2% on its high interest savings account. The account also has some chequing account functionality so you can make bill payments and e-Transfers for free.

        Personally, my banking and investments looks like this:

        TD Bank: Chequing account (I keep a minimum balance to waive the monthly fee)
        EQ Bank: High interest savings account for emergencies

        Wealthsimple Trade: RRSP and TFSA (invested in Vanguard’s All Equity ETF – VEQT)
        TD Direct Investing: LIRA and RESP (LIRA is invested in VEQT, kids’ RESP is invested in TD e-Series mutual funds)
        Questrade: Corporate Investment Account (invested in VEQT)

        I wish I could put everything in one place, but WS Trade doesn’t offer LIRAs, Corporate Accounts, or RESPs.

        As for credit cards, I’m with you on the PC World Elite MC as we live close to a No Frills and its accompanying gas station. For Costco, I’d look at the MBNA Rewards World Elite MC which pays 2% back on all spending (must redeem for travel booked through the MBNA portal). I’ve ditched any Air Miles affiliated cards as I don’t find the points to be very useful.

        My dirty credit card secret is that I look for Aeroplan branded credit cards when they have a good sign-up bonus (i.e. 25,000 points, no annual fee for a year), and sign-up, make the minimum spend, and then cancel after 11 months. That little trick got us four nearly free flights to Edinburgh and back last summer for a 32 day epic vacation to Scotland and Ireland!

        • Carrie Peters says:

          I agree – as Canadians in Vancouver who retired a few years ago in our early 50’s- wth the advice from Turia and Robb.

          Especially – using a TFSA for a savings account does not truly take advantage of that opportunity. Ideally, you would invest in mutual funds or ETFs with high growth potential and low fees in your TFSA, and withdraw that money last each year in retirement (after using CPP, OAS & RRSP) or to top up to a certain level without starting to trigger the OAS clawback.

          I also second EQ bank; you can hold multiple savings account, each with their own name, at 2% interest. Good for your emergency and short-term savings funds. I also switched here from Tangerine.

          We also use TD e-series funds (low MERs) and use many of the same credit card strategies as Robb. I track spending and net worth in excel spreadsheets, but then I’m fond of spreadsheets and graphs anyways!

          The book “Your Retirement Income Blueprint” by Daryl Diamond was invaluable to us in our planning, and following some of his advice saved us fro.m panicking in this downturn as we watched our RRSPs decline.

    • Suzanne says:

      Agree on the hydro and gas bills…up here in Canada our bills are pretty close to the same too. Your car and house insurance are in line with your area.
      P.C has a no fee mastercard available that we use the points to get free groceries. We can also use this card at Costco so no need for the extra costco card. In Canada, only really need 2 credit cards (MC and Visa) so check which two you get the most benefits from and stop using the others.
      For financial management software, check with the bank you use to see if they have one available on their online banking system. Ours works great as we have all accounts at same bank.
      Wow. $84/m for life insurance plus Beth’s $35 extra coverage. We pay 1/3 of that. You may want to shop around for prices, you may be surprised the insurance you can still qualify for with pre-existing conditions.

    • Beth says:

      Wow, Turia! Thank you for your long post! There are so many great comments here. Yes, our TFSAs are both in cash and you’re right. We’re missing out on a lot of opportunity. I don’t really understand index funds so I will need to research to understand exactly we can do here. As for the PC express, it just means I don’t pay the pick up fees. PC has re-introduced the fees after the initial pandemic and so I don’t pay any fees. I also got 3 months for free because at the beginning of COVID, you couldn’t get a timeslot to save your life! And your tip about using only my PC card for groceries is SPOT on. Great idea! I have a cashback Tangerine credit card that I might use and then our Costco card can be used for dining and Costco (since we’re like 2 kms from it). Thanks again for your comments and feedback. I really appreciate it! AND thanks for the Boomer and Echo blog recommendation!

      • lindsay says:

        I’m loving the Canadian Content! and think the above points are great. One thing to keep in mind (that I learned when my parent retire) is that RRSP’s are automatically converted to RIFFs when you turn 70. I don’t understand all of the details of this, but it becomes more of a controlled pay out unlike the TFSA where you can do whatever you want. Further to the awesomeness of TFSAs; you can take the money out with no tax implications anytime you want (unlike an RRSP). I have emergency savings, but then I use my TFSA as back up if life REALLY hits the ditch… With the TFSA I know I have this pot of money that isn’t going to ruin me at tax time.

  8. Karen says:

    Beth! Love your handcrafted signs, perhaps ETSY or local farmer’s markets to find a fun side hustle, kiddos especially get into making and selling their handmade crafts, so have fun!

    I agree with Liz about having way too many accounts. Having one online savings account with a better interest rate allows us to categorize our savings (distribute amounts for fixed annual expenses and loftier goals like vacations/reserves/sinking funds.) This has helped us tremendously in prioritizing and making progress.

    As for fun money category–I prefer a more specific categorization–my husband and I enjoy eating out so we call that what it our “eating out fund”, we enjoy going on trips so we call that our “trip account”, having an additional “fun money” or “miscellaneous” category just gave us an opportunity to blow money impulsively. I have found that reviewing our credit card statement for a few months gave us the exact categories that we spend money on that has helped us budget accordingly. I would maybe add a bit to the other budget categories and get rid of the miscellaneous $240, just don’t give yourself that option–you probably won’t even feel it, well except for the savings improvement–that is a great feeling!

    I am a big fan of the homemade spreadsheet for keeping an eye on everything in one place, and use a free expense tracker app for the day to day that eventually goes into each month’s reviews. I also keep track of our networth by month, this has made such a difference in staying the course we’ve set out, and the ability to pivot when we hit some bumps.

    Congratulations to you for doing the deep dive and getting a handle on this– “You can’t change what you don’t measure”—Karen

  9. StephB says:

    Canadian here! I live in Toronto and I worked in Aurora (next town over from Newmarket) for 8 years 🙂 Nice to see a local person profiled!
    A few notes for everyone!
    -PC points are great because you can use them for groceries too! When you put your bills on that credit card the points add up really quickly. I like that credit card because you will always use groceries, and Joe Fresh is great! I spend way less per month (single no kids) and I get probably $75 a month free. This was pre-pandemic when I was using more gas but still!
    -Cable, and phone bills are insanely expensive here!!!!! Being in a city there’s not really a reason for it. There are a few big companies and they all just have crazy prices. The discount companies are a bit cheaper but nothing like what you have.
    I guess you could do the Roku or whatever? But it’s hard of you like live sports! GO LEAFS GO!
    -Car insurance is wayyy more than the states, mine is about 225 a month, and my renters insurance is about 36.
    -Food is more expensive here too
    -Degrees are in Celcius LOL! In case you were confused about the temperatures!
    -We pay a good amount of taxes, but we have universal health care, so we don’t need HSAs. Canadians out of work during the pandemic have been able to receive 2000 a month. Thankful for all of that! (In case it seemed like I was complaining about the cost of living here.
    Beth – I grew up playing hockey too! So many good memories with friends, especially at tournaments! My sister and I are still very close friends with so many hockey girls!
    I am amazed at your mortgage payment! I pay $1165 for a one bedroom in the city, which is very ‘cheap’. I am so envious that you have a whole home and backyard!! Great job getting your house when you did!
    Jessica Moorhouse has a lot of great resources for Canadians! Definitely check her out, as she knows all the ins and outs of TFSAs, RRSPs etc!

  10. Kayaking Canadian says:

    Okay. Canadian here who lives in roughly the same geographic area. That matters since our part of Canada is much more expensive than, say, the Maritimes.

    A few immediate thoughts.

    1) The general approach is to max our your RRSP contributions annually before moving to TFSAs. While I am not a financial advisor, and I would strongly encourage this couple to talk to one, the thing about RRSPs is that your current contributions are tax deductible. The thought is that when you finally withdraw from your RRSPs you will be in a lower tax bracket than you were in when you made the contribution. As I understand, most people will max RRSPs out before moving to TSFAs. There are annual limits to what you put in both types of accounts. We max out both annually and then the remainder of our savings are invested in non-registered accounts – so lots of accounts.

    2) These guys live north of the GTA were taxes, insurance, etc are going to be high. I live an hour west (hi, neighbour). As well, these costs generally tend to be higher in Canada, or at least Ontario, anyway. I know I sometime read your (Frugalwoods) costs and I am shocked at how cheap things are. To give you a sense of things, both our property and car insurance costs are higher than Beth and Brad’s. Our home and car values are slightly higher than theirs which probably explains the increased costs.

    3) Same goes for WIFI/cable. Our costs run similar. Data costs, in particular, can run high.

    4) I wasn’t too surprised by the number of accounts. Again ours look similar. One has to have separate RRSP, RESP, and TSFA accounts. So my husband and I each have those accounts, though the RESP was combined for our three kids (our youngest is in university and we will deplete this fund in the next couple of years). We also have non-registered accounts, a cash account with our financial team that acts as a temporary holding tank when we move money around, as well as two bank accounts (checking, savings) – so in the end we actually have more accounts I think!! Our net worth statement has many lines!

    5) You mention OAS, but not CPP. I would encourage the couple to check out what government supports they are entitled to. I will admit I am no help here. CPP is based on earnings and contributions, but there is a clause for caregivers (I think). I’m going to be honest and admit that all of our retirement planning has been based on NOT receiving the funds (though we will received some)- in part because we are in our 50s, are FI, but not RE, but also in part because we are in a high income/tax bracket which reduces what we will receive. The funds won’t form a significant part of our post-65 life and we have found it easier to plan on not having the funds.

    6) We do not have all of our money with one institution. We have basic financial stuff – checking, savings, etc with CIBC, and the remainder of our investments – RESPs, RRSP, TSFAs, non-registered accounts , etc – managed by a fee-for-service advisor with a reputable investment firm. I love our advisor, and more importantly I trust them. For me, having excellent financial advice was more important that having all money under one roof. Financial advisors at banks here in Canada have had a bit of a bad rap lately – some have been accused of peddling funds that work for the bank, not the client.

    7) For me, Sirius XM would be a non-negotiable =). How else do you get CBC wherever you are?

  11. Chris@TTL says:

    “Brad and I give each other $120 per month as ‘play money’. Is this the right approach?”

    That’s an interesting approach. I’m curious as to what the money actually gets spent on.

    For example, if it’s pretty random stuff:
    – Video game
    – Salon visit
    – New gadget
    It probably makes sense to keep it as a “fun money” pot.

    However, if it’s consistently being spent on the same thing (a monthly salon visit, for example), then those expenses probably need to wind their way into your budget/spending plan and tracked that way.

    I don’t think that’s something Jenni and I have really thought about doing, most of our expenses are consistent enough, except for holiday gifts, that they fit into predictable budgets.

    Relatedly, we use Mint, which Beth and Brad mentioned. It works well enough for us (since ~2007!), but the user experience has certainly lagged behind. Still, it has so much of our data and the tools are useful once you’re comfortable with them. Beth and brad mentioned the apps, but their desktop website is much more functional.

    • KNinChicago says:

      We also do have about $120 a month in “fun money” for my spouse and I. It gets used for when we’re doing social events w/o the other (say, if I go to book club alone and buy a drink there, or if he meets a buddy for lunch) or for hobby purchases–for him it’s hunting/shooting stuff, for me it’s often exercise equipment or books. Sometimes we save up that money each month long term to buy a larger fun expense. For example this month I used some of mine to buy a rolling cart at Aldi to keep my books on near my reading chair, he used his to treat himself to lunch when I was at work.

  12. Alison says:

    Alison from Toronto here-could you use your refund from RRSP contributions every year and put that into tfsa? Also, I suggest no more monetary spending gifts for adults, bake/make something or have Emmy make them something (or vistaprint a picture of her on a mug etc.). Just gifts for the kids is what we now do, I have one and my sisters each have two 😊 that is my two cents

  13. Christine K says:

    I really love the signs you make! They are certainly high enough quality to sell. I make lots of things and refinish furniture, but my signs made out of recycled scrap wood are very popular. You didn’t ask this question I know but I was wondering if you would consider selling them for some side income. That money could be put towards any one of your goals or be used as fun money.

  14. Miriam Kearney says:

    I have read the other comments so won’t talk about what they covered; they all made sense. I have tried all the money management software that you listed Beth and have finally settled on Tiller Sheets which is a system based on Google Sheets (online Excel). What I liked about the other systems was the ability to have my accounts downloaded automatically and Tiller handles this as well although it is slightly more work for me. What I LOVE about Tiller is that it is a spreadsheet so I can adjust it to suit my particular situation. What I didn’t like about the others was their way of handling budgets and always ended up having to create a spreadsheet for that – way more work. With Tiller everything is updated automatically and I can set up my budge exactly the way I want it. Here’s the link for it. https://www.tillerhq.com/ and if you have any questions they are great at helping you. I would be happy to answer any questions you have as well. I have to say that this is the first time I have fully felt in control of my money.

  15. Claudia Haviland says:

    One thing that really jumped out at me was $2500 loan from Brad’s parents. Although it is 0% interest, I would personally pay it off right now. They do appear to have the funds available. My husband and I borrowed money once from our parents in the past, and we made paying them back the top priority. To us, it was a matter of pride and also the belief that the money should be in their accounts, gathering returns for the parents.

  16. Megan says:

    I don’t have a ton of unique advice, but 2 things stood out as possibilities I haven’t seen mentioned. 1. On the fun money, if you need that for the unquestioned aspect, try relocating things like hobby expenses, possibly clothing or haircuts to that money. 2. I don’t completely understand the cards, but it looked like at least one had airline miles. Would it be more cost effective to fly to NC when you go instead of paying for gas and hotels to get there?

  17. Brennah says:

    Hello! Canadian reader here – my life circumstances are different from Brad and Beth (not married, no kids) but I thought I’d chime in. I am also in Ontario.

    Moneysense.ca has a great Canadian credit card comparison tool – can look at fee/ no fee and by reward type (cash back, points). I think the PC MasterCard is a good bet given that Beth uses PC Express – PC Optimum points rack up quickly if you pay attention to the flyers and she gets the multiplier bonus. Maybe see if there’s one other card that complements your grocery spent (i.e. travel points, recurring bills, etc.).

    As for insurance, honestly that amount seems not bad by Ontario standards considering they own a house and have multiple vehicles. Mine is $567 yearly for rental home insurance and $80 a month for a car with low yearly mileage. So!

    If you and Brad think you can move to online streaming services only, I would recommend unbundling your Rogers package – Koodo has great deal for cell phones (you can get rid of a land line if you haven’t already – can set it up so if someone calls your cell it rings the house phone too) and then you can shop around for the cheapest Internet-only offers (mine is $50.84 a month with Rogers).

    Savings accounts! May or may not work for you, but I have 3 accounts (emergency, vacation, and “other people’s weddings”) with EQ Bank, an online only bank like Tangerine that is CIDC insured. My interest rate is 2.0% (not a typo) – I moved from Tangerine. I have it set up to auto pull money to these accounts from my chequing at a different no fee bank (Simplii) when my paycheque hits.

    Also, I use YNAB and love it – much better than Mint in my opinion. I download account details weekly and import the file to YNAB.

    Happy to chat about other Canadian PF things!!

  18. Anne says:

    I think you forgot to include extracurricular activities (Hockey etc) in your expenses. It ends up making it a bit confusing why your expenses look so much lower than your income, but savings (other than retirement savings deducted automatically) are not terribly high.

    Do you really need a new car? If you’re really looking for something not fancy to drive around town, it seems like you already have that – unless there are issues with the car that you didn’t mention in the case study, of course.

    As you’re looking at home repairs/upgrades, I would focus first on those that are going to make the biggest difference to how you live in the house – like the door upgrade to have a cross-breeze, before ones that are simply aesthetic.

    Wishing you the best of luck in your plans! I’m quite jealous that the Canadian system is so much more supportive of families and retirement.

    • Beth says:

      Hi Anne, thanks for commenting! We save $100 a month towards our daughter’s hockey but it won’t be enough this next year as hockey fees will be somewhere around $2k – $4k (but who knows what is happening with the pandemic!). I’m saving for a car because my current car is 15 years old and beep beep is doing well but I want to ensure I am well prepared and don’t have to take out a loan. And yes to for the cross breeze!!! Thanks again!

  19. Allison K says:

    Newmarket Walmart Supercenter has curbside pickup for groceries. Their grocery app is super easy to use and curbside pickup of groceries is free in the US, so likely free in Canada, too. On top of this, we’ve found Walmart to charge less for most groceries than our local grocery chains AND they substitute name brand products for store brand prices if they run out of store brand products while filling your order. I’d advise looking into Walmart grocery pickup to see if you can save yourself $120 a year on PC Express pickup fees and possibly even more on grocery prices, too. They have competitive pricing for other home supplies, too, (these items are where our local grocery chains really empty your wallet) and you can get them right in your trunk with your grocery order.

  20. NorthernFIRE says:

    It the home is worth $900,000 they might want to think about selling now, and renting/moving to a much cheaper part of even Ontario. Almost 1 million Canadians have deferred their mortgage payments until the fall due to the pandemic so now is the time to take that appreciation. Additionally, we will no doubt see higher taxes due to the increased Gov debt and capital gains / real estate transactions might be affected. They should max out both TFSAs and RRSPs. anything listed on US stock exchanges should be inside the RRSP as the US recognizes RRSPs as retirement vehicles and won’t charge a withholding tax. Growth stocks and Cdn stocks / etfs should be in your TFSA. Once you retire gradually draw down your RRSPs into your TFSAs (use your RRSP money to continue to make the maximum contribution to your TFSA.

    • Wilma Hovius says:

      This could be a great idea, but I would say that if they are tied to their work places, there will be no cheaper areas for them to move to, in southern Ontario near Toronto. The Greater Toronto Area is the second most expensive area (other than Vancouver on the west coast) in Canada to live. The costs of buying a house in Newmarket will be the same (or very similar) to every other city in the area. And going further out (even somewhere as close as Barrie, for example, which is less than an hour north of Newmarket with only slightly cheaper housing), would mean a horrific commute because of the ongoing traffic issues.

      That is a great comment re using RRSPs to contribute to TFSA!

  21. MaryP says:

    I use YNAB and it is worth the annual fee. The thing I like most about it is that it is forward planning so you decide where your money will be spent instead of looking back after it is spent. It also is easy to set up different categories for things like emergency fund, individual savings, individual checking, etc. where the budgeted amounts are managed yet the funds are in only one physical account that is displayed at a glance on a sidebar – much easier not to overdraft! It is very flexible and user-friendly. You set up your own categories and organize them any way you want, and it is easy to transfer money between them. YNAB offered a free trial period and great customer support.

  22. Kathryn says:

    Yay a Canadian case study! I switched from Mint to YNAB about 18 months ago and while yes, it does cost money, wow what a difference it’s made in my finances. I couldn’t recommend it more – I’d say it’s more proactive and less passive, so it really makes me think about and plan for goals, vacations, etc etc.

  23. Meg says:

    haha I’m someone who has 10 separate savings accounts, though they all are with the same bank. It’s taken me a long time (and many financial misteps) to find a system that works for me. My brain has a really hard time processing/understanding numbers, so this is what works for me. I need to know what savings account is true savings and money that I can’t touch unless it’s an emergency, and what money is set aside for vacations, and therefore money I can spend. I also have a hard time with budget categories that I don’t spend every month, like clothes. I can designate say $20/month for clothes, but I don’t spend exactly that each month. So I put that $20 into an account named clothes, and then when I’m ready to buy clothes I can see what’s available to me. Same with things like car and renter’s insurance that I only pay once or twice a year. I know it won’t work for everyone, but it really helps me keep a handle on my money (and I know a spreadsheet or something tracking subsets within one account could do the same thing, but I know myself and I know I’m not going to follow through on that lol. It gets too easy to dip into the emergency savings.)

    I use Mint, and while I get annoyed when it duplicates all of my credit card charges from one specific card every month, it’s really helpful for me to be able to see what I’ve spent/haven’t spent in specific categories. I also like adjusting on the fly when I perhaps spend $200 on books one month, and see that I need to pull back on eating out.

    I love the signs you make! I would be really clear if you want to turn it into a business, because for some people that can take the joy out of a hobby, or put more external pressures on something that you normally just do for fun.

  24. Mary Ellen says:

    I’m not in Canada, but the cat bill looks reasonable to me. Cutting back on pet food costs isn’t good in the long term, since cheaper food generally means cheaper ingredients, which means more vet bills (and/or possibly prescription food) down the line. It may be possible to get a brand with less advertising that’s still good quality, but since their cat is 15 years old, it seems unlikely it would be willing to switch to a new kind at this point!

    • Jean says:

      I agree to not cut back on food quality for the cat. I feed premium food to my small dog and would cut back on my own food, alcohol, travel, etc before I would feed cheaper food. So important to the little animals health.

  25. amber says:

    Canadian here! Yes our hydro, cellphones – auto insurance – groceries etc are all so much more here.
    I live just outside of Vancouver BC- Hydro $150 a month for a small townhouse. Insurance over $100 a month. Cellphones are $200 a month for my husband and me. Car insurance close to $200/mo (and we have one car to save on costs). We don’t have a larger competitive market for these services so they are fixed/more expensive. Groceries are also very very expensive. Oh – also gas for vehicles is very expensive here too! Pre pandemic many friends I know travel with jerrycans across the border to fill up and bring back gas.

    You are both doing a great job. Hockey is wonderful (and expensive!). I know many families now have been pushed out of the sport due to costs. Soccer is much bigger where I live. If you can do it – do it! What an amazing experience for your daughter.

    We started using our PC mastercard for almost all expenses (like everything). We have a joint one. Pay it off weekly. The points can get us $100-$400 a month in free product at PC. Maybe utilize one card to maximize points?

    Best, amber

    • Melissa says:

      Agreed, its super high here! I live in Vancouver and commute less than 20km to Richmond and insurance for my car is 200+/month. I think I saw that gas here was 1.40 or so last week too so I feel that Beth’s gas costs are reasonable.

      Beth- I’m wondering if its possible to re-allocate the Joe Fresh spend from PC Points to groceries/household supplies directly and switch to thrift stores for some clothing (and hockey gear…because YEAH its not cheap)? Or if you’re in the store already buying Joe Fresh products, you could nix some of the click and collect fees? These are obviously very minor things, mainly because given your fixed expenses, I think you’re doing very well:) Use that TFSA to invest though haha.

  26. Margaret says:

    I am Canadian. Living 1 hour west of Toronto. Cottage owner 2 hours north of Toronto. Been frugal my entire life….61 years.
    I am unsure of whether Beth’s expenses are being quoted in Canadian or US dollars. For my comments I will assume Canadian. I would say Beth is doing fine with Rogers, car insurance, gas (home heating) and Hydro. In fact until pandemic hit Ontario had one of the highest hydro rates on the continent. Maybe she could do better with home insurance; I don’t know.
    What stuck out for me in Beth’s situation is that she is looking forward to shared cottage ownership. That is a HUGE expense. We have a cottage in Ontario cottage country. Inherited it from my Mother in 1992. Property taxes are around $6000. (six thousand) per year. This on a cabin on a lake on 2 acres property with no toilet, no shower, no hot water, no washer/dryer. We have just installed these items so I am holding my breath to see what it will go up to. Then there is the capital gains tax. If you get good advice and plan waaay ahead there are ways to deal with that. Then there are the usual bills-hydro, winter snow shovelling, etc. Sometimes we cannot afford insurance-just too much $$$.
    The other side is I would not change having this cottage for the world. It is part of the family farm? (lousy soil and granite outcroppings) settled by my ancestors 147 years ago. I am 5th generation on the land and my children are 6th. Every summer my extended family gathers here for several weeks and hang out. as we are retiring this means we are here for longer and longer in the summers. Except of course for this summer. About 2/3 of my extended family is American and can’t be here. I completely understand the lure of the family cottage.

  27. Jecca says:

    Thanks for sharing your case study. I am assuming all of the data is in Canadian dollars and not US dollars? The current exchange rate is about 1 Canadian dollar = 0.75 US dollar. This will make a huge difference for many people reading this study (from the US) and may change some of Mrs. F’s advice…

  28. Barbara Hanley says:

    I am a Canadian retiree (retired 5 years now) and agree with Turia. Do not assume you will get OAS, but you will get CPP. As well I would not necessarily assume that one will work as long as you might think. We had some health issues that resulted in our deciding to retire early and I was so thankful that our finances were in order which allowed us that option.

    When we started saving for retirement, TFSAs were not an option. Our advice though is that it is all about taxable income. If you are at a high rate of tax now then RRSPs are great. You get $$ back now and can invest those – maybe in a TFSA. For our young adult kids we are suggesting TFSAs initially while their tax rate is lower (and their salaries). We have three set ups beyond CPP. RRSPs, some TFSAs and also nonregistered investments. We did not get a defined benefit plan from our employers so needed to plan all this out ourselves. We have interest type investments in the TFSA because interest is taxed as income. We have dividend paying Canadian stocks in the non-registered accounts due to tax rules and everything else is in our RRSPs. One thing to check is to see if there are any matching or similar programs through employment. We found that when these exist they seem to work through the RRSP system.

    I cannot really speak to your spending as we are far from the kid cost days but we also gave ourselves some regular cash (our allowances). We used these for money to grab a coffee or something when keeping track was just a pain. It worked well for us. We use Quicken and have all our accounts in the same institution which works out very well indeed. As to credit cards we have one with a high limit that gets cash back and another free one that has an extremely low limit that we use in less secure transactions- like parking meters and internet shopping.

    Oh – our working lives were in the GTA but after retirement we moved a couple of hours away, and into a smaller home which freed up a ton of money that we then invested (in those dividend paying stocks)

    Good Luck !!!

  29. JD says:

    I’m in the U.S. The cat bill looks about right to me, too, especially if at that age, the cat is seeing the vet more than once a year (senior cats in my area go to the vet twice a year) and if one is counting in any medications such as vaccinations, worming or flea medication.

    I don’t know the reason for the home insurance prices there, but here in Florida, our property is valued at right at $100,000, and we pay about $130 a month ($1,550/year) for insurance — thanks to hurricanes, everyone here gets to pay high homeowner’s insurance.

    If Beth and Brad are sometimes overdrawing their accounts, they need to streamline their accounts. Also, can they set up overdraft protection without a fee? It is an option at my bank (actually, a credit union). Perhaps they could investigate that at their current account holders. What about an automatic transfer? Income all goes into Account A, with an auto draft into accounts B, C, and D, and they know they have the amount of those drafts to spend in those accounts, and no more.

    Let me add, good for Beth and Brad to realize that their house will never be perfect, and that it is silly to spend money for endless upgrades trying to achieve perfection. One thing I found after many years was that, upgrades I fretted about because we couldn’t afford them at the time, turned out later to be unneeded or totally different from what I thought we would need, just a few years down the road, so I ended up glad that we didn’t spend money on them. On some remodeling ideas, one can wait and see. I think Beth and Brad’s list of remodel projects is very reasonable.

    Good job, Beth and Brad!

  30. Rita Dorsch says:

    Hello, Excellent job Mrs. Frugalwoods regarding your research on Canadian RRSPs and TFSAs. In addition to the OAS, we also have Canada Pension Plan (CPP). I completely agree that Beth and Brad should use the CRA retirement calculator for retirement planning and testing different scenarios. There are instructions on how to get your CPP estimate as well. It can give them a perspective on how much they would be living on each month and whether or not to direct future savings to RRSP or TFSA. For myself, using this retirement calculator was a total eye opener.

    Also, it looks like their employer retirement plans are defined contribution plans as opposed to defined benefit plans. There are pros and cons to each type of plan, but I mention the type of plan because it makes a difference when planning and using the retirement calculator.

    Now that Brad is 50, it might be time to begin looking at his RRSP portfolio more closely and consider whether or not he should make plans in the coming years to start to move some of it over to safer investments. If we have another recession like 2008, the value of his portfolio could be reduced greatly at a time when he is planning to access his RRSPs. Beth and Brad may also find it helpful to sit down with a fiduciary financial advisor to discuss their retirement plans.

    I agree, Beth and Brad seem to have a lot of bank accounts and credit cards and that simplifying things could be beneficial. If they haven’t already done so, linking accounts and setting up automatic transfers may be helpful as well.

    I agree that an area to think about reducing would be the tv. I also agree with Mrs. Frugalwoods suggestion on the $120 per month spending money.

    Also, since Beth works from home, I was wondering if she is able to claim some of her internet and other home costs as other employment expenses when she does her taxes?

    Regarding the RESP for their daughter. Current costs for a 4 year undergraduate degree at a university out of town is about $20k per year. If she moves away for post secondary education, and the value of her RESP does not cover all of her tuition and living expenses, it might be a good idea to have a backup plan for this scenario (or perhaps you already have one and I missed it).

    I agree with Mrs. Frugalwoods that the extra $100 per month that Beth and Brad are paying towards their mortgage principal might not be making making much of a difference. It is not hard to build an amortization schedule in excel (or use one from the bank website) that will help see the impact that the $100 is making and then decide from there.

    I agree with the previous poster, especially about setting your priorities and then letting those priorities guide your actions.

    Good luck, and I think you are on the right track. You have lots of savings and I am impressed with all the planning and that you know the amounts that are earmarked for specific purposes. I am glad you and your husband persisted so that you are on the same financial page. And I admire your courage to share all this information with everyone. I hope I did not come across as being judgmental about anything.

  31. Mintkitty says:

    I live in Toronto and would like to suggest EQ bank. They have no fee chequeing account that gives 2% daily interest with no minimums!! Just amazing haha

  32. Cara says:

    Hi- thanks for sharing your case. We’re about your age, facing some of the same issues. I just have two thoughts. 1. Our sons all participated in the same relatively expensive sport- fencing. (Broken foils make excellent garden stakes, maybe you get the same results from hockey sticks?) We definitely use gift-giving occasions to buy new gear. But, usually one item- so the occasion isn’t about just one interest. We do the same thing with other price-y things that need replacing, like laptops. The kids don’t mind refurbished gear or tech, either. If it meets their specifications, they’re thrilled with what’s new to them. 2. I agree with taking a hard look at your retirement savings products and who administers them. If Congress takes no action to correct funding, Social Security will not be able to pay 100% of benefits the year I turn 65. Even if they do manage to fund it, well, to quote Will Rogers, “Where’s the money going to come from?…It has to come from those who have got it”. That will hopefully be me. So, however I look at it, it behooves me to save more reliably elsewhere.

  33. Mike says:

    Love this Canadian Case study, thanks for the great writing as always 🙂 I’m in Ottawa so will happily chime in with a few practical suggestions:
    1. TFSA vs RRSP: Mrs. Frugalwoods is right this depends on your specific tax situation. This is a good resource https://www.moneysense.ca/save/investing/tfsa/tfsa-vs-rrsp-decision/. Worth noting though that when you get your tax refund from investing in your RRSP that this should all be put back to work in investments in your RRSP!

    2. Car insurance: that number seems reasonable for Canada in your area but of course depends on driving history etc. One thing to consider is whether you need collision insurance (i.e. act of god insurance if a tree falls on your car etc.). I recently decided I don’t need that in addition to my liability insurance and this dropped my rate about $35/month. My take is that if your car isn’t worth much what’s the point in over-insuring it.

    3. Internet: I’ve been using Start.ca which is quite affordable at $40/month. Worth a look if you’re considering a change. Not sure if it’s just in Ottawa or not though. TekSavy would be worth a look too.

    4. Software: I’ve been using Wealthica which links my investments to a neat dashboard similar to Personal Capital. It gives a neat overview of networth and investments all in one place. It’s not really a budgeting software though. If you’re looking for a monthly budget tracker good old fashioned excel always works.

    5. Credit cards: I have the tangerine World MasterCard as well. For most people I think this is one of the best no fee cards.

    6. Savings accounts: I’m not sure where your non registered savings accounts are but I really like what some of the online banks are now offering. I’m using EQ bank which offers 2%, is easy to set up and also allows multiple contributors for multiple savings accounts for different goals. FYI here’s a good source for top savings accounts based in interest rates https://www.highinterestsavings.ca/chart/

    7. Investing: Not sure what your investment plan is but this is worth a whole different conversation. Overall, where you have control I’d suggest looking at low cost index funds made famous through the “couch potato” approach https://canadiancouchpotato.com/. Personally I used index funds with a sustainability lens following some coaching from a fee for service financial planner https://www.goodinvesting.com/ . If do it yourself (DIY) funds are too overwhelming (although it’s really not too hard once you get the hang of it!) I’d suggest looking at Wealth Simple as a RoboAdvisor. Overall stick to low cost index funds through DIY or robo investing and don’t pay for mutual funds through the big banks!

    Hope that’s helpful 🙂

    P.S. Mrs Frugalwoods, I just finished your book and it was fantastic. It was a different spin than many other finance books in the best possible way. Thanks for sharing your writing talents and finance knowledge with the world 🙂

    Mike

  34. Clementine says:

    Dear Beth,
    Your signs are lovely! Have you considered Etsy? You might set a goal to pay for your craft supplies with your Etsy earnings:-)
    Haircuts are one of the areas where I disagree with Mrs Frugalwoods (shocking, I know:-). It sounds like Brad sees a lot of people daily for business; I would continue getting professional cuts, if there is something to work with, that is;-)
    I know that diabetes, as disease and management thereof is very tied with weight and diet; a family member normalized his sugar levels with weight loss; but I do not know if it is possible to stop insulin once you are on it?. I wonder though – in Canada – can you see a nutritionist under the health care coverage? In general, managing weight with a condition such as this might not only be different / more difficult but also might be considered a medical need. I wonder you should see one even if it is not free; instead of an app if cost is a concern. I believe it could be very useful/helpful. Best of luck!

    • Clementine says:

      PS this year, your family and friends could receive a custom-made sign; which would be very special for them; and allow you to cut costs on at least one Holiday season.

    • Tammy says:

      We can definitely access a dietitian and diabetes specialists with our provincial health care system.

  35. G.P. Burdell says:

    Another example of excellent, realistic Mrs. Frugalwoods advice! I agree that while a $120/mo play money might be a lot of some couples, if that’s what it takes to get Beth and Brad on the same wavelength regarding finances, then it’s the right move. Rather than cut that money, I’d probably transition clothing and hobby purchases to be paid from the “play money” fund.

    I just really appreciate that Mrs. Frugalwoods offers advice for real people with an emphasis on doing what makes you happy, not the crazy, extreme advice like some I have seen in the FIRE movement.

  36. Karyn Semple says:

    I have a PC financial card as well for the points, I don’t know about the world elite version, I have the basic silver card so there’s no annual fee.

    My one suggestion is to move your savings (at least the rainy day type ones, not emergency savings) to Wealth Simple. When I started with them pre pandemic their savings interest rate was 2%. It’s dropped to .9% for now, but still a better rate than Tangerine.

  37. Yes way way too many accounts……I have one savings and one spending account and one credit card. I manage my “goals” on a spreadsheet so if the account has one figure on it I know $ is for bills $ is for food $ for christmas etc. I would pay the parents back their $2500 straight away as they seem very generous but no need to have that debt. Personal money could be reduced to $50 each and given the pandemic dining out could be cut out altogether and you could make “fake away” ie pizza, pasta, chinese etc. pick a recipe put some music on and make it at home as a family.

  38. Marci says:

    I am not a physician or qualified to give medical advice. I would like to share that my husband and I had no control over our diabetes until we started eating a whole foods plant based (WFPB) diet. Watch a documentary such as Forks over Knives, What the Health, or the Game Changers for more specific information. Even though it has been over a year since we made this change to our way of living, we are still amazed at all of the benefits and how much we save on food. We both have lost over 100 pounds. I hope this information helps. Also, look up Caldwell Esselstyn Jr. and T. Colin Campbell for more information. Also feel free to contact me.

  39. Mary says:

    I’d like to generally chime on Beth’s future career plans from a geographic perspective. It must have been so stressful to get laid off through no fault of your own from several jobs. Good for you keeping such a positive attitude about these challenges. It seems to be a common issue with a lot of companies who now often want to only hire people on contract and pay no benefits or who often downsize without warning.

    I’m also a fellow Canadian who lives in the GTA (Greater Toronto Area). For our US and International friends, what this means from a job perspective is that everyone who lives 50 kms outside the GTA will have a one to three hour soul sucking commute EACH way every day with traffic or if using public transit. This is similar to New York, L.A., London, etc. and getting worse every year.

    I wish you well wherever your career takes you. But when you think consider any new job which may offer a bigger salary, please make sure you factor in the financial and mental cost of the commute. It may be worth taking a position at a lesser salary closer to home and not in Toronto.

  40. Ontarian says:

    Fellow Ontarian here: Hydro could be electricity, not water, right? To give a fair comparison, it would help helpful to see how many kwh/month they are using. I live in a different part of Ontario, and our hydro, ie electricity,the rate varies by time of day and day week. Generally, nights and weekends are cheaper. For credit cards, there is a great tool by the Financial Consumer Agency of Canada where you can compare them side-by side. For money spent for your daughter, I think it would be a great way to teach her financial literacy by having her prioritize certain items/ activities. I agree with giving her winter gear and hockey stuff as presents. Some goes for other big ticket items such as bicycles, skates, skis, etc.

  41. Erin says:

    Thank you for sharing your story, Beth, and thank you Mrs. Frugalwoods for featuring another Canadian! I’m a Canadian and live east of Toronto. Mainly repeating what others have said (too many cards, too many accounts, ease up on Christmas gifts). Turia raised some key points about the TFSA. If I could recommend Beth and Brad make any change, I would suggest you start putting all you can into your TFSA and use it to buy some dividend-generating stocks, GICs, etc. You can then get more like 8-9% interest (TAX FREE) and still be able to access it if need be (unlike the tax ding when you pull from an RSP). Beth, if you’ve never put money in a TFSA you can use up all your past years of contributions and put in $69,500 to grow tax-free! Brad would have that amount minus whatever is in there. Using the TFSA as a low-interest savings account as he currently does squanders the opportunity to see some real returns. RBC Direct Investing has some good videos and even though it does seem intimidating, you can educate yourself about solid stocks to buy and then start making trades and seeing returns. I agree with Turia, the “savings account” part of the name is really misleading.

    Thank you for sharing your story, Beth. You sound like a nice and thoughtful person with a lovely family. Best wishes to you!

  42. Megan says:

    As a fellow diabetic (Type I for 32 years), I’d suggest doing all you can to improve your health; long term it’ll save thousands. I was low-carb for a long time, but when I went whole-food plant based vegan (for ethical reasons) all my heath metrics substantially improved. If you’re interested, check out Mastering Diabetes by Cyrus Khambatta. Best of luck!

  43. Sam says:

    Bear in mind that the “Costco” credit card is actually a terrible card to use at Costco. People don’t look any further than the co-branding, and Costco makes off like a bandit.

    Even from the cards you already hold, you’d get a better return by using your PC WE or BMO WE card than Costco’s own. –And those aren’t the best you can do 😉

  44. Katie says:

    In regards to the question on what financial management software to use, we love using Gnu Cash (https://www.gnucash.org/). It is free and you can set it up to capture everything and generate reports/summaries. For me, it took a bit to get used to it and build the habit of entering transactions, but now I love how we have all of the information and can analyze things year over year.

  45. Allison says:

    I’m American so I am not sure what is reasonable in Canada. However, I am from Illinois and have lived in Germany and now Tennessee. Those heating/electric and insurance costs seem really reasonable to me. They are equal to or lower than what we have paid in any location. We completely renovated our house in Illinois- spray foam insulation inside, plus new insulation and siding on the exterior, new roof, new windows, and geothermal heating and we averaged $145/month in heating/cooling. That was the lowest we’ve ever paid at any house. It has been closer to $300/month in Tennessee with heat set at 67F and a/c set at 78F.

    I also think the $120/month fun money for each adult is reasonable but maybe your crafts and your husband’s gaming expenses should come from that fun money.

    As far as the multiple bank accounts goes, I would consolidate some. We have 4 accounts. We have one account for our daughter that consists of savings/camps/education (we homeschool). The individual budget categories are divided/tracked in an excel sheet. Then we have two savings- one for our emergency fund and a savings for annual expenses (again divided in an excel sheet). Plus, we use a checking account for more immediate monthly expenses. Our budget is all tracked with an excel sheet.

    What is your daughter’s savings intended for? College or to be used by her for other things? You are so fortunate to have such generous parents and I hope your daughter is aware of the great love and financial assistance they provide. She is at an age that is prime for teaching her financial responsibility and the value of the privileges you provide for her. For my daughter, we consolidated her accounts and established a budget for her items. Then, every time money is spent, we show her the account so she is aware that the money is spent and where it goes. I want her to have the financial education my husband and I never received from our parents. I would also recommend that your daughter write or draw thank you notes to the grandparents when they give financial gifts such as the money for camp. My daughter has grandparents that have chosen to financially support their other 2 grandchildren by paying for childcare, Disney trips, and sports fees, etc while they sometimes forget to acknowledge my daughter’s birthday. We live in a different state so it is more a matter of out of sight out of mind. However, they are very concerned about receiving the “proper” thank you whenever they do gift her anything. We always thank them for anything they do but my daughter understands that she is not treated the same and it affects her relationship with them. Having loving and supportive grandparents is a blessing and a relationship that should be cherished.

    Last, I think you are smart to prudently make renovations and to pay off your house before retirement. It sounds like this is your forever home so making necessary updates without going extreme sounds like the right path. We made huge and expensive changes to our last house- some out of necessity and others for environmental reasons; but, my husband was transferred out of state as soon as we completed the renovations. We lost so much money that it made me physically sick. In our new house, I keep reminding myself to live with things for now. It is better to save money than to strive for perfection. Good luck. You are doing well!

  46. Elizabeth Whitmore says:

    Your house insurance seems high for a city. Look for affinity insurance because you went to a certain college or university, who your employer is. I worked for a hospital so mine is through the Cooperators. We pay $49.00 every 2 weeks for a 2020 Rav 4 and a two year old house. I realize newer vehicles and houses are cheaper rates because of safety features. Ours dropped $240 a year when we got a new Rav 4.

  47. Brian says:

    Beth (and Mrs.FW): Thanks for sharing your financial picture, both the detailed numbers as well as the frustrations, challenges, hopes and dreams that inevitably come from family life! From a fellow-Canadian in Kitchener-Waterloo you seem to be on the right track and, as noted by so many readers, your expenses seem very reasonable given your circumstances and where you live.

    I assume that your pension accounts are defined contribution plans leaving you with lots of matching funds from your employer, but little ability to direct those investments outside of a limited basket of high-fee mutual funds. If you have more flexibility to direct these investments within the plan (talk to your HR), or can live with a little more risk in your other savings accounts (consolidate a few into one larger TFSA), I would suggest moving/investing into low-cost diversified ETFs with a larger potential for growth (80% equity or more). You have at least 15 years ahead of you; why not make that money and time work a little harder for you. Think of the equity in your home, future OAS and CPP as the ‘rock solid backstop’.

    You mentioned wanting or needing to learn a little more about some of these investment tools/topics. I really like the Ontario Securities Commission site for starters as it covers things in an understandable, unbiased way without any advertising.
    https://www.getsmarteraboutmoney.ca/

    Take care and all the best moving forward!

  48. Kate says:

    Hey! I just want to give another vote for moving from Tangerine to EQ bank for your basic savings! They are basically the same but more than double the interest at EQ! I’ve had a positive experience having my sinking funds/emergency fund with them.

  49. Justin says:

    As mentioned, above, it’s nice to see a Canadian case study for your Canadian readers including myself.

    The struggle with the number of accounts is real, as my wife and I have recently tried to consolidate everything into a single chequing and savings account. We’re almost there, but it’s taken a while given all the things that go in and out these days.

    I would look into what banks are offering if you open up new unlimited accounts, we switched to TD last fall and got $300 for opening the account, which as a good incentive, a lot of banks were offering them in the fall, but who knows what it’s like right now. I find with the unlimited packages it’s easier to have fewer accounts. Given how much $$$ you have, there’s no reason you should be paying overdraft fees. $5 / month is $60 / year, that seems to be going just down the tube.

    A couple of other comments:
    As mentioned above, couch potato investing is great, and the website makes it easy to understand. I would encourage you to look into that even for the RESPs for your kids, as 10% down seems quite a lot.

    There’s also a great formula for how risky it should be essentially:
    100% equities until they are 9, and then reduce by 10 percent every year, so that by the time they are 18 you are in a really safe portfolio.

  50. Catherine Boulay says:

    Hello Beth,
    My husband and I are Canadians and we use MasterCard Odyssey for big and small purchases as it allows us to accumulate travel bonus dollars and it provides travel insurance. Our plan is to pay for airfare with our bonus dollars for our next big family trip (2 adults & 2 children) to South America in two years (should the pandemic ease down).
    Wishing you and your family many fantastic trips to Scotland,
    Catherine

  51. Kristin says:

    Not Canadian so I can’t offer specifics, but I also appreciate the need to keep my “funds” separated, but want the convenience of having them all in one place. In the US, there are a number of online banks that allow this (SmartyPig and CapitalOne 360 are two I know about). For example, if I have $5,000 in that bank account total, that’s very easy to track on my spreadsheets/Mint account. However, when I go onto the bank site, that $5,000 is broken into: $1,000 for a vacation fund, $2,000 for a camp fund, and $2,000 for an emergency fund.

    I like knowing that I have safety savings AND fun savings, and this works well for me to keep them separate. When I just had one general savings account, even if I had $5,000 in it, I would feel like I couldn’t spend the $1,000 on a vacation because it was *savings* and special and only for emergencies.

  52. Victoria says:

    I agree with others that you could consider having crafts, PS4 subscription etc as coming from fun money, perhaps dinners out too (from the existing $120). Cait (Canadian blogger – The Year of Less), did a clothing ban with a pre agreed list of things she needed to but during the year. You might not want a full ban but perhaps a pre agreed list of what is ‘necessary’ and anything else comes from fun money?

    You could see whether Canada has bank accounts that allow you one account split into sections. In the U.K. I can get this through Starling, so one account but different designated pots within it for different things like new car, clothes etc. That would help reduce the number of accounts. If possible you could combine the child camp and child savings together into one account too.

    I’m on the fence about the diet doctor because on one hand it feels like there is enough free information available, but I also have chronic conditions so I know how difficult it can be to mess around with something that’s working. My endocrinologist has been recommending saxenda (the US name) for weight loss but it’s not available on the NHS so I’d have to pay privately. It might be covered for you though. I’ve been on orlistat which has helped somewhat. Just mentioning it in case it’s relevant to you, don’t mean to be preachy.

    I also struggle with the idea of spending money now while I can enjoy it vs potentially for health reasons not being able to enjoy money, or the experiences it pays for, when I’m older. It’s hard to know whether one is being practical or just making an excuse for the thing you want now! It’s something that people without chronic conditions don’t often understand.

    Remember, just writing all your finances down was a big step for your family so while people are providing good ideas, even if you agree with them it’s reasonable for it to take time to bed in for you.

  53. the kirkster says:

    For savings on insurance-try kanetix. It’s an insurance comparison website. Also make sure you know what you are covered for. Maybe you could reduce your coverage and /or increase your deductible? Also check miles driven per year. They usually default at 20K. You can get a reduction if you drive less than that.
    Most people think they will be in a lower tax bracket when they retire and they will be able to pull $ out of their rrsp with less tax liability. Many people pay more tax in retirement ’cause they are makin too much. You have to take out a certain amount every year. Combine that with your oas + cpp+ part time job = more tax..
    Sometimes if you call your cell/isp/cable/streaming service and tell them you have found a lower rate they will meet that price. Saves you having to change all you billing/disconnect/reconnect fees.
    If you have a whole life policy, maybe you can use your dividends to pay your premium?

  54. Jen says:

    I personally would make paying back the loan to relatives a priority. I noticed you mentioned several times that the relatives pay for what seems like a lot of things, and that you sometimes rely on them for interest free loans. I think that would be a great area that you could plan to be more self sufficient in the future. If I owed any relative money, my #1 priority would be paying that back before all else. Thanks for sharing your story – you’ve been through a lot and have coped with all of it a lot better than most people might have. Good luck!

  55. Marie-Josée McDonald says:

    Fellow Canadian chiming in. I too use the PC Mastercard, but exclusively at Provigo (former Loblaw’s in Quebec) and Shopper’s (Pharmaprix in Quebec). For all other purchases and recurrent expenses we can charge to a card, we us the National Bank World Elite Mastercard. Although my husband and I both benefit from travel insurance through our employers, those insurance plans don’t include trip cancellation insurance or lost luggage insurance. For a $120 annual fee, the card provides us with $5000 travel cancellation insurance which we find is a good trade-off. We actually benefited from this insurance a year ago when my husband injured his back one week before a trip. The process was simple and the payout was hassle free. The card also provides good cash-back rewards. We have renovated a home a few years ago and all purchases were charged to this card and we have received about $3000 in cash-back in the past five years. I would also suggest looking into the Mawer funds. A large portion of our portfolio is invested in the Mawer Balanced Fund, a great performer with a 0,91 MER. That’s a low fee for a managed fund. You guys are doing so well! No consumer debt, a happy child and community.

  56. Erin says:

    Just a few quick thoughts without reading through what anyone else posted, but I don’t remember much that my parents bought for me, but I vividly remember the trips they took my brother and I on <3 Just a reminder for parents. Also, I remember the first thing that my parents wouldn't buy me but would let me buy with my own money. It was a New Kids on the Block t-shirt from JC Penney and I wanted it so badly but it was THIRTY-FIVE DOLLARS (For a t-shirt in the 90s!!!) and I now think it's idiotic and am thrilled my parents knew that and taught me that lesson. Lol.

    I don't know much about Type 2 diabetes and keto (because it's extremely low-carb but also high fat, I'm not sure if that works for you target macros), but this lady is an amazing FREE low carb resource: https://alldayidreamaboutfood.com/ (a lot of her recipes are very health fats so maybe something to check out?)

  57. You guys are doing great Beth. Thanks for sharing your story. Another vote for YNAB. I use both Mint and YNAB. I like Mint because of the trending graphs they offer of spending over a time period. I use this to do my monthly end of month spreadsheet budget where I kind of do a post mortem of our spending. It helps me see where we can tweak things and where we need to reign things in. Mint is also very good at bringing in transactions in close to real time. In my opinion it might be worth only using the credit cards that work with Mint just so you can be consistent with tracking your spending.

    I LOVE YNAB for it’s budgeting prowess. I have never been a successful budgeter but last year I gave it a go. I recommend watching Nick True’s YouTube videos on how to YNAB. I watched a handful of those and they were SO helpful. In fact, I don’t think I would have been able to figure out YNAB on my own without his expert step-by-step easy to follow guidance. I highly recommend!

    I can honestly say that using Mint and YNAB have changed my life and my relationship with money. I feel much more empowered, in control, and less anxious. Also reading the Frugalwoods blog and doing her 30 Day Frugal challenge really helped change my mindset about money.

    I agree you could sell your signs on Etsy!

  58. Adrienne says:

    I buy food and litter for my 2 cats from Chewy. I usually get an autoship every 12 weeks that runs me about $100. Definitely recommend switching to Chewy if it’s available in your area.

    • I second this suggestion! I have three cats and I get food from Chewy for $50 each month (dry food but high quality- Royal Canin Brand). I get my litter from the grocery store but I found that if I use brand name litter like Tidy Cats it will last long enough to only change it every 6 weeks or so. Of course those are decisions you have to decide if they are right for your home/cat but I remember I had the impression that I needed to change them every week and I have 4 litter boxes so was spending so much $$$. I switched to every few weeks and as long as I put enough in and scoop every day it isn’t much different. I also just read you can put baking soda under the litter to make it last longer but I havent tried it yet!

  59. Isa says:

    As a fellow Canadian, 700$/month for groceries for 3 is low! We are a family of 4, doing price matchs, rebates, clearance food, etc, and still paying about 850$/month for groceries. Food in the US is really cheap compared to Canada.
    The cell+tv bill and the Hydro bill is also pretty standard.

    • Isa says:

      I forgot!: The PC MasterCard is great!! We use it for everything, pay in full every month (so zero fees or interest) and we get back about 800$/year in free groceries!

      Aldi, I have to respectfully disagree with Mrs Frugalwoods about the suggestion to cut out the extra monthly 100 on the house, as anything extra really makes a difference in the end! We have been paying as much extra as we can on our house since buying it 10 years ago and it will be paid off this year! Mortgage free at 35 (hubby) and 40 (me) feels amazing! Our house was bought for close to 300 000$ and we make less salary than the poster, so it can be done.

  60. Luisa says:

    I’m coming to this pretty late and have not read the comments. I’m not Canadian but I am a stickler for process improvement and simplification. I know a lot of people that started out with multiple bank accounts as a way to manage and have visiblity over spending categories. But you can do this type of management using way fewer accounts if you are willing to keep a ledger- computer spreadsheet works perfectly for this—and still track what is being saved up for a goal and/or spent on a category. I think this makes sense I’m today’s world also because (at least in the USA) the higher some checking/money market/savings accounts go, sometimes you get better rates or waived fees charged for minimal balances. Also there is value in shifting around credit cards. I have added certain travel cards such as Southwest and Marriott Bonvoy and gotten large cash 1 time payments by doing a certain amount of activity in the first 3 months that i would have done anyway- FREE CASH!! Can’t beat it and an infinite ROI (with a denominator of $0!)

    • Luisa says:

      And actually I should add that I’ve closed my Marriott and Southwest cards since for any additional benefits accumulated I have no idea when I’d even be able to use them or want to use them.

  61. Erin says:

    It’s great to see a Canadian Reader Case! I think it’s really important to know your numbers. I like the old school Excel spreadsheet to track my finances. I input my income and expenses by category every month and also do a net worth of all our combined accounts to make sure we are on the right track. It’s great to see how much your net worth has increased over the year. If your expenses are correct, you should be netting ~ $2500/month in savings which is not really seen in your saving accounts. I am very surprised by how low some of your expenses are. Hydro, water and natural gas, we average about 300/month due to some infrastructure costs that are fixed every month and that’s in a small townhouse. Also, your car maintenance fund, is only $240 per year. The cost of a license renewal sticker in Ontario is $120 so you only have $120 left for maintenance for the year. That’s barely 2 oil changes and nothing left for an older car. You’re probably overspending in a lot of areas over the year and aren’t aware of it. It takes me about 30 mins/month to go over all our expenses and you might be surprised how much you spent. With this pandemic and (being pregnant) we have spent way too much eating out! Also, maybe utilize your Amazon Prime Video and delete one of the tv services you have. Seems you’re doing well overall. I have a 1 year old son and one on the way, but I’m already dreading extracurricular activity costs especially if we go into hockey!

  62. Irene says:

    Hi Beth, we kinda have a similar set up for our money, except that all my personal expenses – haircuts, occasional highlights, Sally beauty supplies, crafts, donations, going out, diet doctor, etc – come out from my monthly allowance. I found it to work better that way, rather than using a family budget for all those miscellaneous categories.

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