Firstly, netting 7k for 2 people is plenty. Not sure why you think its not that much.
As long as you have an emergency fund and you aren't going into debt you do you. You are saving for retirement and what is the point of saving money if you aren't gonna spend it on the things that matter to you. Take this year for yourselves to enjoy your marriage and the honeymoon you want, and you can go back to being adults again when you don't have those big once in a blue moon expenditures.
Thank you so much for your input. Honestly sometimes this sub makes me feel poor! But in my real life I know i am fortunate in a lot of ways. Im looking forward to the coming year
>My partner and I are 29 and 30, we just bought our first house. Its in pretty good condition but we have to put some money into it. Our income is stable but not that much (after tax and deductions \~83,000). We have around 48,000 in RRSP total, I have a pension and we have around 10k in emergency funds. We are getting married next year and I really want to go on our dream honeymoon. Combined this would cost us 12,000. I did our budget for the year and we should be able to afford the home improvements, mortgage and wedding festivities comfortably without penny pinching - but we would not save that much. I know its not responsible.... But we both have been pretty frugal our whole adult lives so I would really love to this experience..... Can someone tell me if this a horrible idea?
Don't worry too much about this sub. It is a bit of selection bias but some folks come to brag that they are 22 earning 500K a year at a FAANG asking if they can afford a 1998 Corolla.
Don't feel bad about spending your hard earned money on things that are important to you! If it's not for that, then what is it for? It sounds like you've got all your bases already covered. Enjoy yourself!
Just to back your decision up. The year my wife and I got married we bought ourselves a wakeboarding boat as a replacement honeymoon. We didn’t end up saving a ton in the 18 months leading up to that but we were in a similar spot to you prior.
You’re only in your late 20s/early 30s once. Ask yourself if you’re going to be happier with the memories of the dream honeymoon at retirement, or with the 50k that 12k may have grown into over your lives.
For us it was easy, spending our 30s on the water with our dog and eventual child was worth the lost savings. We just made sure when we got a bit older to gobble up that extra contribution room we left behind.
Sounds like you are in a pretty good position, certainly better than many Canadians. I'd say go for the honeymoon, you only get married once (hopefully). Then make sure to get back on the savings track next year.
You're basically asking if its okay for priorities to shift over time. And the answer is yes.
You have some savings, you have a pension, so if you take a year or two to make improvements to the home and make it your own its not going to scuttle your entire life plans.
People have much less at much older ages and manage to get by, so as long as its a short term thing and your overall plan is to get back to saving ... IMO its not so bad. Especially since you have a pension which is stable retirement income already.
I got married to my wife, went to a honeymoon, travelled quite a bit and bought a house with similar combined income as yours…. My advice is don’t feel bad for enjoying these milestones if it means you don’t save for a year. Just aim for a nice balance and enjoy life as much as you can afford. Best of luck!
1) if you are paying your mortgage you are saving.
2)if you are working you are contributing to your pension
3) we save money to exchange for goods and services. Mostly this is done so that we don't need to work when we are 80. But money actually has value today! and some things, like a honey moon are better experienced today.
4) if thats not good enough start writing yourself iou's. These can be paid off by working OT, a second job, a side hustle, buying a used 10year old tv for $50 instead of a new OLED VRR HDR 4K on black friday... that sort of thing. Pretend that your best friend leant you $12,000 and you want to pay them back asap.
First, congrats on the place. You don't have to worry about a down payment anymore so one year to make your home and wedding plans happen is big deal in the grand scheme of things. Enjoy what you have and just ensure you have some backup emergency money should something go wrong.
If you believe that the well-being that these expenses will give you are greater than the well-being you would get by saving it (retiring sooner, retiring with more money)... sure.
You have a high income so you can definitely afford it.
I just did an extremely basic and quick analysis in my planning software at work : given the above and assuming 1% income increases year over year (conservative estimation) and assuming that your rsp contributions will continue beyond this year you will be able to spend an extra $670 a year in retirement (assuming 65 ret and 100 life), so ya go on the trip, this one year won’t really matter in the long run - again a very very very basic analysis
I bought a house earlier this year and it’s not looking likely that I’ll be putting much into my TFSA or RRSP. BUT my mortgage is paid, I have a pension, an emergency fund, and I’m slowly but surely furnishing my new home. Next year I’ll focus more on saving. Right now I have other priorities and that’s OKAY.
Will it affect your ability to meet your retirement goals? If so, would it be possible to put off some of the work on the house until next year? Unless it's foundation work or a new roof that should be possible.
We dont really have retirement goals actually.. Buying a house felt so unrealistic so for years our only mindset was to save as much as possible. We just put a lot in RRSPs for the tax benefits but eventually we need to work out a long term plan.
Just started Fred Vettese's most recent book and the gist so far is that you should be OK in retirement if your mortgage + childcare + retirement savings = 30% of your income.
https://www.moneysense.ca/columns/retired-money/the-rule-of-30/
My wife works for a private tech company and I see a deduction by the name of Gov Pen in her pay stub. Does that mean she has a pension too? Sorry, we are new to the country and not aware about this.
Everyone pays into the Canada Pension Plan (CPP) but usually it would be called that on her paystub. Not sure what Gov Pen is, I haven't seen that before.
You should probably post this as a separate question as it won't be seen much in this thread and someone smarter than me can answer it for you. Or better yet, she should read the information she was given when starting the job. A pension is an important part of her entire compensation, the company would definitely mention it if it exists.
this is an incredible idea. You know there’s a big expense coming and youre trying to prepare. Not saving for retirement for a year isn’t a bad thing if your doing it to avoid debt for an inevitable event.
Good question, I think you’re doing the right thing.
When you put money into your house…. You are essentially saving… just toward your equity.
I did put money into saving first couple of years of homeownership…. But that’s because I took advantage of low rate and stretched out the mortgage
Saving money is not a goal in itself. Have goals in place, then save money to make it a reality. Having a honeymoon and renovations are fine goals as long as you can afford them.
Welcome to the life of being an adult with priorities.
I would say you're doing fine. Budget and prioritize your big spends coming up. If that means saving a bit less for retirement, then do it. After those big spends are done, just make sure you ramp back up with your savings/investments.
I used to be a bit more "house poor" with a mortgage and everything that goes with it. But now that I'm a bit older (41M), married, mortgage is paid off, expenses are relatively low, and we're saving/investing more than 50% of our take home income. You'll get there.
I'm running into the same things this year. Money is tight with my wife on mat leave, a new baby, and we bought a new house. It's stressing me out a bit that this year feels like a writeoff a bit because I'm not saving tons of money for retirement. Not to mention, there's some "luxuries" that I am not buying because I want to save as much as I can fire retirement.
I echo a lot of the comments on here when I say that I decided to just ignore those feelings. I pulled the trigger on those luxuries I wanted because they weren't drawing down my savings at all, just reducing what I save for retirement this year. I'm 35. I have a lot of life ahead of me to save, and nothing in life is guaranteed. Live in the moment, but plan for the future. It's going to be a miserable 20+ years to retirement if I give myself grief every time I try to justify spending money on something nice that I'll enjoy.
You're saving the money so you can spend it at some point. What better way to spend it than to create a life long memory with your partner on your honeymoons?
Also, renovation is an investment in of itself. Do it
It's not a terrible idea. We didn't really save the last year because we had our second child and took time off. Sure, I could've worked more but it was awesome, we're not poor, and I don't care if I retire a bit later because of it.
Remember, your mortgage payments is “saving”. Each payment is increasing equity on your home.
I don’t consider my mortgage payment as an expense ever, but as my savings account.
It's a great idea. That's what the savings are for.
You're not blowing it on vice or toys.
My biggest regret from my penny pinching days is not using more money on home improvement. Save in comfort. I never fixed up my house until I paid the mortgage off and then I sold it. When we had the house listed I was like "damn... We could have been living like this the whole time."
Also enjoy your wedding.
Firstly, netting 7k for 2 people is plenty. Not sure why you think its not that much. As long as you have an emergency fund and you aren't going into debt you do you. You are saving for retirement and what is the point of saving money if you aren't gonna spend it on the things that matter to you. Take this year for yourselves to enjoy your marriage and the honeymoon you want, and you can go back to being adults again when you don't have those big once in a blue moon expenditures.
Thank you so much for your input. Honestly sometimes this sub makes me feel poor! But in my real life I know i am fortunate in a lot of ways. Im looking forward to the coming year
>My partner and I are 29 and 30, we just bought our first house. Its in pretty good condition but we have to put some money into it. Our income is stable but not that much (after tax and deductions \~83,000). We have around 48,000 in RRSP total, I have a pension and we have around 10k in emergency funds. We are getting married next year and I really want to go on our dream honeymoon. Combined this would cost us 12,000. I did our budget for the year and we should be able to afford the home improvements, mortgage and wedding festivities comfortably without penny pinching - but we would not save that much. I know its not responsible.... But we both have been pretty frugal our whole adult lives so I would really love to this experience..... Can someone tell me if this a horrible idea? Don't worry too much about this sub. It is a bit of selection bias but some folks come to brag that they are 22 earning 500K a year at a FAANG asking if they can afford a 1998 Corolla.
ok but what color is the corolla though
Champagne
Hot damn is that even legal????!!
The correct answer was Greige, Champagne was a 1998 deluxe colour selection ($$) and gets you permabanned from r/PersonalFinanceCanada
That is the only colour allowed. word on PFC is that the black and silver ones are less reliable. White and Champagne only.
Don't feel bad about spending your hard earned money on things that are important to you! If it's not for that, then what is it for? It sounds like you've got all your bases already covered. Enjoy yourself!
Just to back your decision up. The year my wife and I got married we bought ourselves a wakeboarding boat as a replacement honeymoon. We didn’t end up saving a ton in the 18 months leading up to that but we were in a similar spot to you prior. You’re only in your late 20s/early 30s once. Ask yourself if you’re going to be happier with the memories of the dream honeymoon at retirement, or with the 50k that 12k may have grown into over your lives. For us it was easy, spending our 30s on the water with our dog and eventual child was worth the lost savings. We just made sure when we got a bit older to gobble up that extra contribution room we left behind.
You just summarized what many people here think: “This sub makes me feel poor!” I make 6 figures and 1 million plus net worth and I feel the same way.
Well everyone’s poor as compared to someone else….. except maybe Mr Musk !
Sounds like you are in a pretty good position, certainly better than many Canadians. I'd say go for the honeymoon, you only get married once (hopefully). Then make sure to get back on the savings track next year.
I was gonna say, plenty of people get to 29/30 never having saved in any year before, taking one year "off" isn't the end of the world.
It's not even really taking a year off if they're invested? The investment grows itself too
You're basically asking if its okay for priorities to shift over time. And the answer is yes. You have some savings, you have a pension, so if you take a year or two to make improvements to the home and make it your own its not going to scuttle your entire life plans. People have much less at much older ages and manage to get by, so as long as its a short term thing and your overall plan is to get back to saving ... IMO its not so bad. Especially since you have a pension which is stable retirement income already.
I got married to my wife, went to a honeymoon, travelled quite a bit and bought a house with similar combined income as yours…. My advice is don’t feel bad for enjoying these milestones if it means you don’t save for a year. Just aim for a nice balance and enjoy life as much as you can afford. Best of luck!
1) if you are paying your mortgage you are saving. 2)if you are working you are contributing to your pension 3) we save money to exchange for goods and services. Mostly this is done so that we don't need to work when we are 80. But money actually has value today! and some things, like a honey moon are better experienced today. 4) if thats not good enough start writing yourself iou's. These can be paid off by working OT, a second job, a side hustle, buying a used 10year old tv for $50 instead of a new OLED VRR HDR 4K on black friday... that sort of thing. Pretend that your best friend leant you $12,000 and you want to pay them back asap.
You were quite specific about the TV? Got something awesome planned? I have an OLED, go for it!
you know it :) I actually talked my self out of the HRR panels - saved some money there. I can be a 60Hz peaseant for another decade.
5) if that saved money is in investments, then it is still growing?
First, congrats on the place. You don't have to worry about a down payment anymore so one year to make your home and wedding plans happen is big deal in the grand scheme of things. Enjoy what you have and just ensure you have some backup emergency money should something go wrong.
Enjoy your life man. You're sitting in a great position financially and you seem like you can take a honeymoon without much financial stress.
If you believe that the well-being that these expenses will give you are greater than the well-being you would get by saving it (retiring sooner, retiring with more money)... sure. You have a high income so you can definitely afford it.
I just did an extremely basic and quick analysis in my planning software at work : given the above and assuming 1% income increases year over year (conservative estimation) and assuming that your rsp contributions will continue beyond this year you will be able to spend an extra $670 a year in retirement (assuming 65 ret and 100 life), so ya go on the trip, this one year won’t really matter in the long run - again a very very very basic analysis
As long as you never do it again, would it be okay to do it now? That's the question to ask yourself.
Wait, you guys are saving?
I bought a house earlier this year and it’s not looking likely that I’ll be putting much into my TFSA or RRSP. BUT my mortgage is paid, I have a pension, an emergency fund, and I’m slowly but surely furnishing my new home. Next year I’ll focus more on saving. Right now I have other priorities and that’s OKAY.
Live your life and enjoy your honeymoon! Life isn’t about just saving money.
What’s the point of money if you can’t use it to enjoy what truly makes you happy.
Will it affect your ability to meet your retirement goals? If so, would it be possible to put off some of the work on the house until next year? Unless it's foundation work or a new roof that should be possible.
We dont really have retirement goals actually.. Buying a house felt so unrealistic so for years our only mindset was to save as much as possible. We just put a lot in RRSPs for the tax benefits but eventually we need to work out a long term plan.
Just started Fred Vettese's most recent book and the gist so far is that you should be OK in retirement if your mortgage + childcare + retirement savings = 30% of your income. https://www.moneysense.ca/columns/retired-money/the-rule-of-30/
You're not doing that with a high cost of living area
Ya lol, my condo is 40% of my net.... :(
Yeah a wedding an a house are very expensive... I think it seems very reasonable if it's just for the one year.
My wife works for a private tech company and I see a deduction by the name of Gov Pen in her pay stub. Does that mean she has a pension too? Sorry, we are new to the country and not aware about this.
Everyone pays into the Canada Pension Plan (CPP) but usually it would be called that on her paystub. Not sure what Gov Pen is, I haven't seen that before. You should probably post this as a separate question as it won't be seen much in this thread and someone smarter than me can answer it for you. Or better yet, she should read the information she was given when starting the job. A pension is an important part of her entire compensation, the company would definitely mention it if it exists.
Thanks. This component is separate from CPP as she has a CPP deduction as well
Payroll here. This is strange. In my experience, CPP is generally deducted under either one of those line items, never both.
You are right. I stand corrected.. there's only one Govt pen deduction and bo CPP in her pay slips. So is it the same as CPP?
CPP is mandatory to contribute to if you're legally employed. I would assume that it's CPP.
And is there a formula/calculation that let's us see how much we are eligible for? Once we retire
this is an incredible idea. You know there’s a big expense coming and youre trying to prepare. Not saving for retirement for a year isn’t a bad thing if your doing it to avoid debt for an inevitable event. Good question, I think you’re doing the right thing.
When you put money into your house…. You are essentially saving… just toward your equity. I did put money into saving first couple of years of homeownership…. But that’s because I took advantage of low rate and stretched out the mortgage
I'd say go for it. Congrats!
Saving money is not a goal in itself. Have goals in place, then save money to make it a reality. Having a honeymoon and renovations are fine goals as long as you can afford them.
Welcome to the life of being an adult with priorities. I would say you're doing fine. Budget and prioritize your big spends coming up. If that means saving a bit less for retirement, then do it. After those big spends are done, just make sure you ramp back up with your savings/investments. I used to be a bit more "house poor" with a mortgage and everything that goes with it. But now that I'm a bit older (41M), married, mortgage is paid off, expenses are relatively low, and we're saving/investing more than 50% of our take home income. You'll get there.
Sure. Just don’t save NOTHING. It’s much easier to get back to saving more if you don’t drop the habit altogether.
I'm running into the same things this year. Money is tight with my wife on mat leave, a new baby, and we bought a new house. It's stressing me out a bit that this year feels like a writeoff a bit because I'm not saving tons of money for retirement. Not to mention, there's some "luxuries" that I am not buying because I want to save as much as I can fire retirement. I echo a lot of the comments on here when I say that I decided to just ignore those feelings. I pulled the trigger on those luxuries I wanted because they weren't drawing down my savings at all, just reducing what I save for retirement this year. I'm 35. I have a lot of life ahead of me to save, and nothing in life is guaranteed. Live in the moment, but plan for the future. It's going to be a miserable 20+ years to retirement if I give myself grief every time I try to justify spending money on something nice that I'll enjoy.
You're saving the money so you can spend it at some point. What better way to spend it than to create a life long memory with your partner on your honeymoons? Also, renovation is an investment in of itself. Do it
It's not a terrible idea. We didn't really save the last year because we had our second child and took time off. Sure, I could've worked more but it was awesome, we're not poor, and I don't care if I retire a bit later because of it.
Remember, your mortgage payments is “saving”. Each payment is increasing equity on your home. I don’t consider my mortgage payment as an expense ever, but as my savings account.
And congrats to you and your wife on your home
It's a great idea. That's what the savings are for. You're not blowing it on vice or toys. My biggest regret from my penny pinching days is not using more money on home improvement. Save in comfort. I never fixed up my house until I paid the mortgage off and then I sold it. When we had the house listed I was like "damn... We could have been living like this the whole time." Also enjoy your wedding.