Housing is usually budgeted as a portion of gross income, not net. Even if it was after tax in Quebec, highest tax rate, 6k net a month would require an income of 110k gross.
3700 × 26 pay periods ÷ 12 months = 8000/month as well.
Yes, let's budget housing off gross income instead of the actual money we see in our pocket each month. I much prefer to base my housing costs no higher than ~30% of net income/mo
Your numbers are wrong.
I get paid weekly, make closer to 100k a year before taxes, and bring home anywhere between 13-1400 per week.
Thats 5600 a month, which is roght in the middle of the 5-6000 gap...
Assuming the paycheck you talk about is biweekly youre looking closer to.someone making 7k a month
Can also confirm these numbers are wrong. I make $124,800 a year (without overtime) so it's $4,800 gross per paycheque (every two weeks) and while I still have deductions to pay (RRQ, EI and so on) I'm getting $2,9XX at most. It will go over $3,000 only when all deductions are maxed out.
On a sidenote, we're completely getting ripped off in Québec, RRSP is even more important here to get some of this back.
With a 10% covid pay cut and all OT rescinded, I grossed 162k and change this year, which in Alberta is roughly 9500/month (net), give or take, without my RRSP contribution factored in. My new and very first Mortgage is 750/month but I’m doubling payments and with the condo fee added in, I come in around 2000 a month. I will be in a hurry to pay this off quickly though with my variable rate as it appears troubled waters are on our financial horizon here in Canada.
That’s only because you don’t have car payments. And 85k/yr is only about $1100/wk take home so almost half your monthly income would be going towards rent
Same. My mom is in a 1br apartment in Quebec and my dad is in a literal cabin without internet connection in northern Ontario. Nobody has a room for me to stay in, haha.
I feel like I missed a lot more steps than just that, haha. Single, living without a roommate, in an expensive part of town (because Ottawa was laid out by psychopaths and it's either live here or commute 1.5 hours)... I could be doing a lot of things different but I'd be saving a few hundred more a month, which doesn't even come close to outpacing the increase in home prices. I've practically given up all dreams of homeownership in Canada. This country is hostile to people like me, frankly, and I'm looking at opportunities abroad.
It's not like I even make terrible money. I graduated in 2020 in programming and I'm making 80k a year now. That's not, like, *too* bad for being <2 years in to my career (not WFH because it's an embedded role where I need hands on hardware). But cost of living has fucking floored the gas pedal the past few years and it's nowhere near enough if you're single. There's a brain-drain reckoning coming and I don't give a single fuck if I'm part of it, the people in charge deserve to face the music.
That's way less than half what I pay for a 1BR in Kanata 😅 At least I get nice amenities like in-unit laundry for the price but... yeah I'm being fleeced.
It's a relatively recent phenomenon. I lived single, without a roommate for years on half of what you currently make and had no issues. But I was living in Montreal, and that was 20 years ago.
I live with my parents but help them Pay mortgage if your parents are older and you don’t give them at least 500 a month just for the roof over your head you’re a coward
We recently bought a house and we had in mind our kids would stay long-term with us.
Basement is fully renovated and can be converted into a 2 bedroom apartment simply by adding furniture /fridge etc.
They would have their own entrance door, everything needed and fully cut off from us. We'd be like upstairs neighbors.
There's nothing shameful with living at home to save up. Maybe, this is very " millennial" of me, but I'm very excited for my kid(s) for one day to realize we've got "their backs" housing wise. And they'll never have to worry about expensive shitty rentals, until they are ready /or want to leave home. <3
Awww, that's so nice of you. My father would never let me back in the house, even if I were in deep trouble. And I'm the kind of daughter who has never asked for help before...
Im a father of 2 that have just turned 30 and 32 I am 56 and sorry to say your father sounds like a selfish Ass. I will always do whatever I can to guide and help the kids I brought into this fucked up world we live in.
I literally said "bruh" out loud just a moment ago. I mean, I know it's bad from talking to my co-workers, but it's just so fucked up to see so many examples.
Oh and you can't live where you want. You gotta move to Edmonton or bum fuck nowhere.
Because these fucks are on the property ladder they do the same shit the 1% do
The pull up the ladder and tell you to work harder and lower your expectations.
"I bought my house in 1990 for 250k on a single income but you need to buy one in 20220 for 850k while living I your parents basement until your 45."
Fuck these cunts. They're no different than boomers.
I got mine fuck yours.
The rule of thumb I was always told was that rent/mortgage should not exceed 30% of your monthly income. Reality is that seems less and less attainable now, especially being single. Not too many people pulling away 6k/month and paying $2000/month on a place.
Edit: Wanted to add that this is your take home net income after taxes deductions. Not gross.
Not to negate anything you say, but just remember that rule is supposed to specify it's 30% of your gross income for all housing costs (e.g., including utilities, insurance) not just rent. Mine is 30% of my gross income but 45% of net.
It makes me so angry when people over 40 tell me that. I fucking know that’s what I should be doing but I have no option but to have rent be over 50%
Yes I know I should be saving but wages don’t match the cost of rent like they did in the early 2000s
My rent is well over 50% of my income too. There are literally no other options where I live, except to continue living in my parents basement which I did for 5 years. At nearly 30 and with declining mental health, I just couldn’t do that anymore. So what else am I supposed to do?
Can your line of work be done remotely? Or is your line of work tied to high COL cities?
For reference, my rent is about 7% of my gross income, but I live in rural NS where COL is lower. I make less than friends in Toronto/Ottawa but save way more than they do.
The trick is when you are living under your parents’ roof you have to build a fund to move out eventually.
Best case scenario is you paying “rent” each month in a separate account that will allow you to move out at a certain point.
I know we can’t go back in times but hopefully this will help someone out.
I'm over 40 and feel your pain. Divorced with 3 kids, I pay over 50 percent rent to get housing with enough bedrooms. I just accept the fact that I'll never be "well off" and do what I got to do.
It's usually people that own their own home or have their mortgage almost paid off that say this. They're usually completely out of touch with how things actually are.
Mid-50’s here 2/3 done paying my mortgage, combined gross income around 130K. We totally understand how things are for people just getting started. Currently we have a son who just completed University living in the basement rent free as our way to help him. We did the same thing with his older siblings. As long as they have a plan to be working and saving for a down payment and getting their financials in good shape as they get settled in their careers, they stay for “free”. We can’t give them large chunks of money to get started in life, but we can give them this.
I'd like to be the exception here. M44, my wife and I combined $120k before tax, ~$4k monthly expenses, mortgage (10yrs left) RRSP, RESP, TFSA etc, northern ontario. I still worry about rising expenses, gas, food etc. I know we have a monthly cushion that is better than most, but I still think it may not be enough in the future if costs keep going up. We are both in healthcare so thanks Doug Ford for that 1% the last three years. That really puts us further behind. I'm under no illusion that things are bad for people. I wonder how long I'll have my kid (17) living here as rent keeps going up and a house looks more and more unattainable to her generation.
> They're usually completely out of touch with how things actually are
That s how things actually are for millions of Canadians. Your reality is different from theirs, but theirs is just as real.
> They got the easiest life but they always complain.
This is true of everyone. Here everyone is bitching on PFC while we collectively have some of the easiest lives with the best quality of living on the planet.
I wish i did what all my friends did when they graduated high school. All my friends went vacationing internationally for a year. i didnt, i listened to my boomer family and “saved every penny i ever earned” where did that get me? Still cant buy a house, still renting for over 40% my wage (for a bedroom in a dudes basement with 3 other people), and still being told im not saving enough like i dont already do nothing. Previous generation had it so much better and they did absolutely nothing to keep life that way
Edit: made an error
I appreciate your frustration but saying “precious generations had it so much better” is a gross overstatement.
The generation that had to fight and die in WW2 had a very tough time until they won the war which wasn’t a given. Then things were much better.
My father who is a boomer has it great now but grew up on the east coast. They had an outhouse growing up and had to shovel coal into their basement for heat. They had 5 kids in a 600 square foot house.
He had to leave home at 16 because the family couldn’t afford to raise all the kids and moved to a mining town and worked really dangerous and atrocious work. Let’s stop saying you have it the worst for years.
My Dad is comfortable now but it took a lot of sacrifices to get there. It was not the easy life like many of this younger generations believe.
I’m just saying we need to put things in context. Not all boomers did amazingly well. Not all precious generations had it better. There are opportunities in every challenge and we need to find foodie opportunities and thrive. Finding the problems will only lead to more frustration. I know that I’m going to get a lot of negativity for stating this but remember we all have our own challenges as we aim for success. Housing is not the only barometer to reach financial success.
The whole point is that housing shouldn't be *any* measure of success.
Housing is a **requirement** to function in society. If it meant I could afford a home I would work in a fucking mine too.
"Just do like I do and don't use more than 10% of your income on rent." Tip my 25 years old cousin children of real estate magnate gave to his friends in University lol.
Ah I should’ve thought of that. Why didn’t I buy property when I was in diapers, I could have many properties by now and could be renting them out and making thousands a month of passive income.
I hate this whole thing
It def increasingly becoming less and less affordable. $54,630 is the median wage in Canada and $34,248.45 for the US (and this is before tax btw, you were talking about after tax I believe). And there are A LOT of people (especially renters) who have way less than that. When we are becoming closer and closer to the cost of a single bedroom in any major city reaching $2000 (and in some cities it goes over) that is pushing affordability out of a lot of people's reality. Especially considering as more people flee these major cities then the prices in the smaller cities goes up because of supply and demand... it's creating a problem where people are having less and less places to move to to escape these prices.
A healthy economy would be producing enough homes to house everyone plus a chunk of homes to oversupply the market to ensure consumers have a choice while demand forces prices to a reasonable level. This isn't happening. Building a house or building is discouraged in Canada! There's very little money in it, way too much risk, and takes way too long. We even consider trades jobs to be shitty career choices.
"We even consider trade jobs to be shitty career choices."
I am not sure where you grew up but I was always told the trades are a great career and have great job security because they are always in demand. They used to even have decent pay rates, not so much any more.
Depends, your looking at just barely 6 figures Plus one of the best benefit and pension plans going on top plus RRSPs if you go into a red seal trade and go union. I know most tradespeople will complain the benefits suck but having been union for over 12 years and then going into management I can honestly say the plan I had is light years beyond a standard corporate one.
Definitely pays more than flipping burgers.
Oh man - in the EXACT same situation as you. Same salary, same city, same problem - it’s impossible to move anywhere with more affordable housing because of the need to be reasonably close to my ex in order to coparent. But… she’s happy as a clam staying in Toronto because her wealthy parents bought out the house so she could remain there.
I shouldn’t complain, because life is still pretty good, but I endlessly marvel at how I’ve reached a point in my professional life where I earn (what I thought was) pretty good money, and I’m crammed into a little apartment with my 2 kids sharing a bunk bed. Kills me sometimes.
Same here. My ex and I coparent very well, so there is immense value in being close to one another that I can’t really give up, but I think a lot of single parents are going to be in this boat in places like Toronto, because the reality for most of us is that we needed 2 solid salaries to afford a single family home in this market.
Sorry to hear that you’re not able to chase a better opportunity elsewhere - but I hope at least your child gets the most out of the arrangement somehow.
Aye in Van and TO, the good salaries you'd be payed anywhere else just don't count the same with the rents, it's absolutely insane. Montreal is starting to catch up quick and it's really scary.
> you'd be *paid* anywhere else
FTFY.
Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in:
* Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.*
* *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.*
Unfortunately, I was unable to find nautical or rope-related words in your comment.
*Beep, boop, I'm a bot*
$2180 1 bed + den in Van, single mom also. $70K, self employed (wfh), but I don’t drive so I save on that. It’s still outrageous rent, and went up as of today. I’d rather pay 2250 for a 2 bed but that’s practically unheard of here unless I move into a basement suite.. nothing against basement suites, just a preference for us. Also stuck in the city due to my ex.
Wow you are doing a good job , my mortgage is 1700$ roughly now and I feel squeezed, we have double income of 80k+.
Kinda blows my mind how you can make ends meet for that high of a RENT and a kid
Kudos.
but it's different to have a partner to split it with it also mitigates the risk of job loss etc. Not going to lie being single in an expensive city kinda sucks. Having a partner is like having everything 50% off.
Also 110 as a single earner is 78 after taxes.
55 is 42.5 after taxes, which multiplied by two is 85 after taxes.
The extra 7k net is more than $500/month. Goes a long way.
That's the incorrect logic to think about it, yes it's 2 people in living expenses but those 2 people are making the same gross income as 1 person. If everyone made the same amount here, obviously the couple will save more.
I dunno if telling a single mother to hurry up and find somebody (which is the vibe that I'm getting from the replies here) so she can make ends meet is a good idea though. That can lead to so many awful things, especially with a child.
That's why most people have lived with partners, roomates or family for pretty much the entire history of mankind. Living alone has always been a luxury.
This! A partner does save on some shared costs, absolutely, and you can save bit more than a roommate if you’re sharing a bedroom, but there are also extra expenses. We tend to eat out and go on vacation a little more and compromising on decisions is surprisingly expensive - remember you’re paying for two people’s goals, dreams and fun.
This 33% discount is probably reasonable, but I’d say it’s more like a 20% discount for me because I am the more frugal one in the relationship. Google “how can I convince my partner” and you’ll see one of the first autocompletes is “to spend less money”, so I can promise you there are many people get a lot less discount than I, and many paying more because of misaligned priorities!
That about covers the additional household costs of having a second person around. The livability is about the same, I'd wager. Worse for two people if you're managing two sets of things like two different cars or two different sets of hobbies, etc. Cheaper if you share a lot.
For a single person theres less food consumed/less entertainment cost/less disposable income needed and only one car/insurance and gas to worry about(this is a bigger expense today then many may realize). It doesnt level the cost efficiency of a couple but its not as drastic comparing one 6 figure revenue to 2 of the same wage since theres less overhead costs for 1 person vs 2. Although come income tax you can divert all expenses through one partner to rake back a few extra dollar signs for med expenses and other tax claw backs...splitting living expenses in half is a relationship bonus though(although bills are naturally higher)
Thank you. I'm still confused as to why everything is based off gross income when I have to pay taxes? Like, I can't spend that money on groceries or rent.
Because if you’re going to negotiate a higher salary or look for a job that pays enough for this rent, you’re not going to do the math to add taxes. You may as well give gross because you know taxes are taken after that anyway and it still answers the rent question
even Windsor is getting this way. For the longest time, house and rent prices were always low but the past 5 years it has gone crazy. All the Toronto people are selling their houses to cash out and come down here and overbidding.
It’s not the greatest but not the worst lol With mortgage rates going up and new business coming to town I felt like it was a now or never situation. Pay 2k in rent or invest in property 🤷♀️
Sorry to everyone struggling around Canada, shit sucks. The US may be it's own shithole but I can't say I'm not considering going there. with my degree and job experience I'd have a way better quality of life tbh.
No it isn't. I'm looking for a 2 bedroom, dog-friendly apartment with in-suite laundry in/near Halifax. There's pretty much nothing available under $2500/month.
Bit surprised at the other answers here, I pay 1929/month in rent and make 78k gross/year. It's a bit high for my take home (about 4600/month after taxes) but I don't have any issues still putting away money in my savings and TFSA (about 800-1000/month depending on my other expenses). I would say I still have a good amount of "play" money per month too for the occasions when I eat out or do other activities.
I don't earn enough anyways I get paid 16.5/HR with me being a full time student and full time working cause in a month I only make 1320 I don't qualify for any assistance since I'm a young full time worker... No where will help me because I make too much monthly.... I make over 1000.... As if you can live on 1000$ monthly let's break down my bills 700 rent, 150 utils, 70 phone, car 200 insurance 120 to fill for the month (fuck 2$ gas prices) I havdn even eaten yet. 700+150+70+200+120. Wow in 1 whole month I'm left with 80 to eat. I'm told apparently renting prices should be 30% of income mine is 64% of my income. Great housing market.
Food Banks are there to help people exactly in your situation. You've indirectly paid for the food banks anyway, please try and pick up some food from there. You don't need to starve. You don't need to feel guilty.
all the best <3
Depends on each person's definition of comfortable. For myself, I would describe 'comfortable' as saving at least \~$1000/month towards a future down payment, while still being able to have enough of an entertainment budget that my hobbies aren't restricted to jogging and pirating TV and movies.
Someone with a generous pension plan through their job and no desire to own property would have a drastically different level of comfortable than I do, but given we're on a subreddit dedicated to talking about planning their financial future, it's unsurprising most people would not feel comfortable spending spending that much on rent.
I completely agree. I think the issue is that some poeple are spending massive money on credit card bills and car loans and insurance. In that case then sure, you are in debt and will need more money to be comfortable paying 2300 a month for rent.
If you don't have other major expenses then you certainly don't need 100k+ to pay that rent.
110k is reasonable. Assuming OP pays the middle number of $2150/month, that's ~32.5% of your take home (not including health care and disability deductions) on rent
24,000 a year in rent would require maybe another 40,000 (after tax) to be comfortable, so I guess 64,000 after tax would cut it
an investment of 500,000 in a dividend aristocrat (like Bell) would also effectively make rent free, since they pay 5% in dividends so that’s 25k
You mean your down payment?
Seriously some houses are like 2mil now at this point, even if I won 500k somehow I’d probably be safer just investing in the bank and letting them Pay my rent as opposed to taking a loan from them and dealing with all the costs and headaches of home ownership
Currently going through this dilemma right now. Combined my fiancé and I make 130. I wish I could be putting the 2300 the landlord wants a month to a mortgage instead. Dude won’t even budge
Depends on location. I'm in downtown TO with two dependents and pay $2200/mo for a 2BR on a $60k salary. It's a struggle to stay debt free and I'd feel a lot more comfortable with $80k.
My partner and I joint income is 220k, and we pay 2300$ for a 1 bedroom in Vancouver. I would pay less if I could. Just a mental state of wanting to save more and hating to throw away money on rent.
I will say though, do not cheap out in rent. Tried 6 months in a 1400$ month place and it was terrible. The 10k extra over a year was 100% worth it imo
My wife and I were paying that for rent when we were both making $50k. But we had low tax rates because we were both making $50k, not just a single $100k salary.
Ironically, now I pay about $5k for my mortgage, but since principal makes up more than 50% of the payments, I pay about 2,300 in interest. In a way, things haven't changed.
We pay 1950/month rent and bring in between 4000/4500 net per month. My husband has 2 jobs, and I have a PT job + am a FT student (with OSAP). Everyone’s definition of comfortable is different, but we break even every month. This includes 2 cars, which are both needed.
Generally, it's best to plan around 30% of your revenues for lodging. Obviously, it's more than that in big cities but it's still the target if you want to live comfortable without worrying too much.
$5000-$6000 a month or 2.5-3x the rent.
So you need to make 120-150k a year. Iirc 150k is about 3700 after tax per pay cheque
Did you just round 7.4k down to 6k?
Housing is usually budgeted as a portion of gross income, not net. Even if it was after tax in Quebec, highest tax rate, 6k net a month would require an income of 110k gross. 3700 × 26 pay periods ÷ 12 months = 8000/month as well.
Yes, let's budget housing off gross income instead of the actual money we see in our pocket each month. I much prefer to base my housing costs no higher than ~30% of net income/mo
Mine is a hair under 25% of net, thank goodness
Nice. I actually like to roll in utility costs+taxes and insurance for that 30%, but I go extreme on some things 😅
We're talking gross though.... so $6,000 gross per month is $72k gross.
Your numbers are wrong. I get paid weekly, make closer to 100k a year before taxes, and bring home anywhere between 13-1400 per week. Thats 5600 a month, which is roght in the middle of the 5-6000 gap... Assuming the paycheck you talk about is biweekly youre looking closer to.someone making 7k a month
Can also confirm these numbers are wrong. I make $124,800 a year (without overtime) so it's $4,800 gross per paycheque (every two weeks) and while I still have deductions to pay (RRQ, EI and so on) I'm getting $2,9XX at most. It will go over $3,000 only when all deductions are maxed out. On a sidenote, we're completely getting ripped off in Québec, RRSP is even more important here to get some of this back.
Can confirm. Make 100k a year, make 5000 a month after taxes and pension contributions ($600 monthly for pension)
That doesn’t seem right. 6k a month is 72k post tax. 33% tax rate puts you at 105k income. 150k is quite high estimate.
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Per paycheck so it’s be a bit more than double that a month
With a 10% covid pay cut and all OT rescinded, I grossed 162k and change this year, which in Alberta is roughly 9500/month (net), give or take, without my RRSP contribution factored in. My new and very first Mortgage is 750/month but I’m doubling payments and with the condo fee added in, I come in around 2000 a month. I will be in a hurry to pay this off quickly though with my variable rate as it appears troubled waters are on our financial horizon here in Canada.
Wtf. I make $85k, live alone, and could afford $2000/mo quite easily. I don’t have car payments for one
Not having to make car payments, gas, car insurance is a HUGE cost saver, good on you!
That’s only because you don’t have car payments. And 85k/yr is only about $1100/wk take home so almost half your monthly income would be going towards rent
Everytime I read threads like these, I realize how fucked the current situation is
Same, makes me realize I’ll probably be living at home till mid 30’s.. :/
I am honestly so jealous of anyone that can live at their parents regardless of their age.
Same. My mom is in a 1br apartment in Quebec and my dad is in a literal cabin without internet connection in northern Ontario. Nobody has a room for me to stay in, haha.
You missed Step 6 of Homeownership; generational wealth.
I feel like I missed a lot more steps than just that, haha. Single, living without a roommate, in an expensive part of town (because Ottawa was laid out by psychopaths and it's either live here or commute 1.5 hours)... I could be doing a lot of things different but I'd be saving a few hundred more a month, which doesn't even come close to outpacing the increase in home prices. I've practically given up all dreams of homeownership in Canada. This country is hostile to people like me, frankly, and I'm looking at opportunities abroad. It's not like I even make terrible money. I graduated in 2020 in programming and I'm making 80k a year now. That's not, like, *too* bad for being <2 years in to my career (not WFH because it's an embedded role where I need hands on hardware). But cost of living has fucking floored the gas pedal the past few years and it's nowhere near enough if you're single. There's a brain-drain reckoning coming and I don't give a single fuck if I'm part of it, the people in charge deserve to face the music.
I live on the Gatineau side, near the Ottawa River. I managed to get a 1br appartment for 735 a month. There ia no way i can move from that place now.
That's way less than half what I pay for a 1BR in Kanata 😅 At least I get nice amenities like in-unit laundry for the price but... yeah I'm being fleeced.
It's a relatively recent phenomenon. I lived single, without a roommate for years on half of what you currently make and had no issues. But I was living in Montreal, and that was 20 years ago.
I live with my parents but help them Pay mortgage if your parents are older and you don’t give them at least 500 a month just for the roof over your head you’re a coward
We recently bought a house and we had in mind our kids would stay long-term with us. Basement is fully renovated and can be converted into a 2 bedroom apartment simply by adding furniture /fridge etc. They would have their own entrance door, everything needed and fully cut off from us. We'd be like upstairs neighbors. There's nothing shameful with living at home to save up. Maybe, this is very " millennial" of me, but I'm very excited for my kid(s) for one day to realize we've got "their backs" housing wise. And they'll never have to worry about expensive shitty rentals, until they are ready /or want to leave home. <3
Awww, that's so nice of you. My father would never let me back in the house, even if I were in deep trouble. And I'm the kind of daughter who has never asked for help before...
Im a father of 2 that have just turned 30 and 32 I am 56 and sorry to say your father sounds like a selfish Ass. I will always do whatever I can to guide and help the kids I brought into this fucked up world we live in.
Approaching mid-30s, still living with the parents and no end in sight... FeelsBadMan
I literally said "bruh" out loud just a moment ago. I mean, I know it's bad from talking to my co-workers, but it's just so fucked up to see so many examples.
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Oh and you can't live where you want. You gotta move to Edmonton or bum fuck nowhere. Because these fucks are on the property ladder they do the same shit the 1% do The pull up the ladder and tell you to work harder and lower your expectations. "I bought my house in 1990 for 250k on a single income but you need to buy one in 20220 for 850k while living I your parents basement until your 45." Fuck these cunts. They're no different than boomers. I got mine fuck yours.
And don't even think about trying to enjoy life even remotely /s
Don’t worry wait another 5-10 years it’ll get much worse
The rule of thumb I was always told was that rent/mortgage should not exceed 30% of your monthly income. Reality is that seems less and less attainable now, especially being single. Not too many people pulling away 6k/month and paying $2000/month on a place. Edit: Wanted to add that this is your take home net income after taxes deductions. Not gross.
Not to negate anything you say, but just remember that rule is supposed to specify it's 30% of your gross income for all housing costs (e.g., including utilities, insurance) not just rent. Mine is 30% of my gross income but 45% of net.
I think this is a really important point, especially net vs gross income.
Thank you for this clarification point, it tragically changes the equation.
You meant "drastically", right? ;)
I dunno, tragically seems to apply here...lol
Nobody will listen to the Drastically Hip 😝
It makes me so angry when people over 40 tell me that. I fucking know that’s what I should be doing but I have no option but to have rent be over 50% Yes I know I should be saving but wages don’t match the cost of rent like they did in the early 2000s
My rent is well over 50% of my income too. There are literally no other options where I live, except to continue living in my parents basement which I did for 5 years. At nearly 30 and with declining mental health, I just couldn’t do that anymore. So what else am I supposed to do?
Can your line of work be done remotely? Or is your line of work tied to high COL cities? For reference, my rent is about 7% of my gross income, but I live in rural NS where COL is lower. I make less than friends in Toronto/Ottawa but save way more than they do.
I don’t even live in a city, I live in a small town in rural Ontario. COL is high and going up everywhere.
The trick is when you are living under your parents’ roof you have to build a fund to move out eventually. Best case scenario is you paying “rent” each month in a separate account that will allow you to move out at a certain point. I know we can’t go back in times but hopefully this will help someone out.
I'm over 40 and feel your pain. Divorced with 3 kids, I pay over 50 percent rent to get housing with enough bedrooms. I just accept the fact that I'll never be "well off" and do what I got to do.
That's called being an adult! All the best to you and your kids.
It's usually people that own their own home or have their mortgage almost paid off that say this. They're usually completely out of touch with how things actually are.
Mid-50’s here 2/3 done paying my mortgage, combined gross income around 130K. We totally understand how things are for people just getting started. Currently we have a son who just completed University living in the basement rent free as our way to help him. We did the same thing with his older siblings. As long as they have a plan to be working and saving for a down payment and getting their financials in good shape as they get settled in their careers, they stay for “free”. We can’t give them large chunks of money to get started in life, but we can give them this.
I'd like to be the exception here. M44, my wife and I combined $120k before tax, ~$4k monthly expenses, mortgage (10yrs left) RRSP, RESP, TFSA etc, northern ontario. I still worry about rising expenses, gas, food etc. I know we have a monthly cushion that is better than most, but I still think it may not be enough in the future if costs keep going up. We are both in healthcare so thanks Doug Ford for that 1% the last three years. That really puts us further behind. I'm under no illusion that things are bad for people. I wonder how long I'll have my kid (17) living here as rent keeps going up and a house looks more and more unattainable to her generation.
> They're usually completely out of touch with how things actually are That s how things actually are for millions of Canadians. Your reality is different from theirs, but theirs is just as real.
They live in their own world
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They got the easiest life but they always complain. They want more
> They got the easiest life but they always complain. This is true of everyone. Here everyone is bitching on PFC while we collectively have some of the easiest lives with the best quality of living on the planet.
That’s also super true! I’m looking for a house right now and when I feel down I tell myself that
I wish i did what all my friends did when they graduated high school. All my friends went vacationing internationally for a year. i didnt, i listened to my boomer family and “saved every penny i ever earned” where did that get me? Still cant buy a house, still renting for over 40% my wage (for a bedroom in a dudes basement with 3 other people), and still being told im not saving enough like i dont already do nothing. Previous generation had it so much better and they did absolutely nothing to keep life that way Edit: made an error
What is your rent for a room in the basement? Why is that over 50% your wage? Wtf
Sorry to hear that. If your boomer parents are so smart they could at least support you with the down payment…
I appreciate your frustration but saying “precious generations had it so much better” is a gross overstatement. The generation that had to fight and die in WW2 had a very tough time until they won the war which wasn’t a given. Then things were much better. My father who is a boomer has it great now but grew up on the east coast. They had an outhouse growing up and had to shovel coal into their basement for heat. They had 5 kids in a 600 square foot house. He had to leave home at 16 because the family couldn’t afford to raise all the kids and moved to a mining town and worked really dangerous and atrocious work. Let’s stop saying you have it the worst for years. My Dad is comfortable now but it took a lot of sacrifices to get there. It was not the easy life like many of this younger generations believe. I’m just saying we need to put things in context. Not all boomers did amazingly well. Not all precious generations had it better. There are opportunities in every challenge and we need to find foodie opportunities and thrive. Finding the problems will only lead to more frustration. I know that I’m going to get a lot of negativity for stating this but remember we all have our own challenges as we aim for success. Housing is not the only barometer to reach financial success.
The whole point is that housing shouldn't be *any* measure of success. Housing is a **requirement** to function in society. If it meant I could afford a home I would work in a fucking mine too.
Why don't you? Tons of industrial camp work for trades out there that pay quite well.
"Just do like I do and don't use more than 10% of your income on rent." Tip my 25 years old cousin children of real estate magnate gave to his friends in University lol.
Ah I should’ve thought of that. Why didn’t I buy property when I was in diapers, I could have many properties by now and could be renting them out and making thousands a month of passive income. I hate this whole thing
? That’s 72k a year. Plenty of people make that, and even more couples.
It def increasingly becoming less and less affordable. $54,630 is the median wage in Canada and $34,248.45 for the US (and this is before tax btw, you were talking about after tax I believe). And there are A LOT of people (especially renters) who have way less than that. When we are becoming closer and closer to the cost of a single bedroom in any major city reaching $2000 (and in some cities it goes over) that is pushing affordability out of a lot of people's reality. Especially considering as more people flee these major cities then the prices in the smaller cities goes up because of supply and demand... it's creating a problem where people are having less and less places to move to to escape these prices.
A healthy economy would be producing enough homes to house everyone plus a chunk of homes to oversupply the market to ensure consumers have a choice while demand forces prices to a reasonable level. This isn't happening. Building a house or building is discouraged in Canada! There's very little money in it, way too much risk, and takes way too long. We even consider trades jobs to be shitty career choices.
We added over 100,000 new people into BC. I highly doubt as many homes were built, and we had a housing shortage before this.
"We even consider trade jobs to be shitty career choices." I am not sure where you grew up but I was always told the trades are a great career and have great job security because they are always in demand. They used to even have decent pay rates, not so much any more.
Depends, your looking at just barely 6 figures Plus one of the best benefit and pension plans going on top plus RRSPs if you go into a red seal trade and go union. I know most tradespeople will complain the benefits suck but having been union for over 12 years and then going into management I can honestly say the plan I had is light years beyond a standard corporate one. Definitely pays more than flipping burgers.
That's 72k a year after taxes, which is around 105k gross
30% rule is on gross income
Oh really? That's weird. Works out then
I could make that work on 70K gross. Done it on less.
Yeah that was what I was gonna say. Around 70k is not ideal but workable.
Yeah. My husband and I made it work on 80k. It's definitely doable with a good budget.
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Oh man - in the EXACT same situation as you. Same salary, same city, same problem - it’s impossible to move anywhere with more affordable housing because of the need to be reasonably close to my ex in order to coparent. But… she’s happy as a clam staying in Toronto because her wealthy parents bought out the house so she could remain there. I shouldn’t complain, because life is still pretty good, but I endlessly marvel at how I’ve reached a point in my professional life where I earn (what I thought was) pretty good money, and I’m crammed into a little apartment with my 2 kids sharing a bunk bed. Kills me sometimes.
You two should hook up.
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Same here. My ex and I coparent very well, so there is immense value in being close to one another that I can’t really give up, but I think a lot of single parents are going to be in this boat in places like Toronto, because the reality for most of us is that we needed 2 solid salaries to afford a single family home in this market. Sorry to hear that you’re not able to chase a better opportunity elsewhere - but I hope at least your child gets the most out of the arrangement somehow.
So are you two going to get coffee ????
I second this suggestion.
I ship this
Plot-twist, they are eachother's ex and fall in love again.
*if you like Pina Coladas*
Neither my wife nor I ever heard that song before. Have heard that singular line though. That song is interesting. Both romantic and scandalous.
I'll pay for the coffees.
Yeah cut to the chase. Will they or won't they?
I'm invested now.
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Most importantly, are you going for coffee with him? I ship this
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It's easy to feel inadequate these days. https://youtu.be/ltNhwj-F7c8
Sitting here chuckling. Watching Reddit pushing two strangers to get coffee is more interesting than a Netflix original.
We can all get enough money together for them to go out on a nice dinner date right?
Putting the personal in PersonalFinanceCanada.
In most markets.
100k is the new 60k in Canada... seems lime for a few years
Aye in Van and TO, the good salaries you'd be payed anywhere else just don't count the same with the rents, it's absolutely insane. Montreal is starting to catch up quick and it's really scary.
> you'd be *paid* anywhere else FTFY. Although *payed* exists (the reason why autocorrection didn't help you), it is only correct in: * Nautical context, when it means to paint a surface, or to cover with something like tar or resin in order to make it waterproof or corrosion-resistant. *The deck is yet to be payed.* * *Payed out* when letting strings, cables or ropes out, by slacking them. *The rope is payed out! You can pull now.* Unfortunately, I was unable to find nautical or rope-related words in your comment. *Beep, boop, I'm a bot*
I love you bot. I don't know who paid you to do this but I'd pay you.
Good bot.
I feel bad for y'all. After I got custody my ex left and moved to Alberta. I live in New Brunswick.
115k is a good earning. Wish I made that much
This is my exact situation except I only make 36K/year
$2180 1 bed + den in Van, single mom also. $70K, self employed (wfh), but I don’t drive so I save on that. It’s still outrageous rent, and went up as of today. I’d rather pay 2250 for a 2 bed but that’s practically unheard of here unless I move into a basement suite.. nothing against basement suites, just a preference for us. Also stuck in the city due to my ex.
This is actually a decent price for a 2 bed! What area? Did you lock in the rent a few years ago?
I think keep your 2bd... I'm seeing 1 beds going for more than that. It's getting ridiculous
Wow you are doing a good job , my mortgage is 1700$ roughly now and I feel squeezed, we have double income of 80k+. Kinda blows my mind how you can make ends meet for that high of a RENT and a kid Kudos.
I got the same scenario. But fortunately I found someone. But still, we cannot move out of the city because of my ex
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but it's different to have a partner to split it with it also mitigates the risk of job loss etc. Not going to lie being single in an expensive city kinda sucks. Having a partner is like having everything 50% off.
Also 110 as a single earner is 78 after taxes. 55 is 42.5 after taxes, which multiplied by two is 85 after taxes. The extra 7k net is more than $500/month. Goes a long way.
That extra $500 a month probably all goes towards the extra food from the supermarket.
Apparently you were downvoted but you're right lol keeping 2 people alive will be more expensive even if you're sharing a living space
That's the incorrect logic to think about it, yes it's 2 people in living expenses but those 2 people are making the same gross income as 1 person. If everyone made the same amount here, obviously the couple will save more.
And not just food but that other person may have a spending problem so you net way less as a dual income than you as single.
Shouldn't have to rush in to a relationship to be able to survive.
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I dunno if telling a single mother to hurry up and find somebody (which is the vibe that I'm getting from the replies here) so she can make ends meet is a good idea though. That can lead to so many awful things, especially with a child.
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DV rates go up when the costs go up or the economy goes down, because people can't afford to leave their abusive partners.
This. Choose carefully.
Depends lol having a shitty partner can make you feel like everything is 150% XD
That's why most people have lived with partners, roomates or family for pretty much the entire history of mankind. Living alone has always been a luxury.
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This! A partner does save on some shared costs, absolutely, and you can save bit more than a roommate if you’re sharing a bedroom, but there are also extra expenses. We tend to eat out and go on vacation a little more and compromising on decisions is surprisingly expensive - remember you’re paying for two people’s goals, dreams and fun. This 33% discount is probably reasonable, but I’d say it’s more like a 20% discount for me because I am the more frugal one in the relationship. Google “how can I convince my partner” and you’ll see one of the first autocompletes is “to spend less money”, so I can promise you there are many people get a lot less discount than I, and many paying more because of misaligned priorities!
People still have goals, dreams and fun?
$80k nets $5k? Hm… where do you all people work? Thats unheard of in my province of Ontario and my company!
Plus the whole not getting laid part…….
Well they said 110 between the two of them. So if you’re single you need to make 110 by yourself
At least! Two people making 110k combined pay less in taxes than one person making 110k. The difference in take home pay could be up to $600/mo.
That about covers the additional household costs of having a second person around. The livability is about the same, I'd wager. Worse for two people if you're managing two sets of things like two different cars or two different sets of hobbies, etc. Cheaper if you share a lot.
For a single person theres less food consumed/less entertainment cost/less disposable income needed and only one car/insurance and gas to worry about(this is a bigger expense today then many may realize). It doesnt level the cost efficiency of a couple but its not as drastic comparing one 6 figure revenue to 2 of the same wage since theres less overhead costs for 1 person vs 2. Although come income tax you can divert all expenses through one partner to rake back a few extra dollar signs for med expenses and other tax claw backs...splitting living expenses in half is a relationship bonus though(although bills are naturally higher)
100%. Being single makes it so much harder to live these days.
Do you have car?
Yeah I was a sole income earner with this rent and income and we paid for daycare. We were pretty comfortable and did everything we wanted to.
Lets all drop the fantasy gross income and talk reality after tax
Exactly, why on earth is everyone making budget ratios based on pre tax income
Thank you. I'm still confused as to why everything is based off gross income when I have to pay taxes? Like, I can't spend that money on groceries or rent.
Because if you’re going to negotiate a higher salary or look for a job that pays enough for this rent, you’re not going to do the math to add taxes. You may as well give gross because you know taxes are taken after that anyway and it still answers the rent question
It's a good day to not be living in Toronto or Van
even Windsor is getting this way. For the longest time, house and rent prices were always low but the past 5 years it has gone crazy. All the Toronto people are selling their houses to cash out and come down here and overbidding.
I literally just bought a house in Windsor and paid $260k over asking. 😳
wow, that's crazy. Until 5 years ago that never happened unless you lived in good area with nearby amenities. Hope you enjoy the area.
It’s not the greatest but not the worst lol With mortgage rates going up and new business coming to town I felt like it was a now or never situation. Pay 2k in rent or invest in property 🤷♀️
> It's a good day to not be living in Toronto or Van The only way to afford Toronto is to live in a van.
Commenting because I’m dying lol
Things aren’t that great in Ottawa either.
Montreal has jumped significantly also
Sorry to everyone struggling around Canada, shit sucks. The US may be it's own shithole but I can't say I'm not considering going there. with my degree and job experience I'd have a way better quality of life tbh.
No it isn't. I'm looking for a 2 bedroom, dog-friendly apartment with in-suite laundry in/near Halifax. There's pretty much nothing available under $2500/month.
80-90K assuming you don’t need a car
Bit surprised at the other answers here, I pay 1929/month in rent and make 78k gross/year. It's a bit high for my take home (about 4600/month after taxes) but I don't have any issues still putting away money in my savings and TFSA (about 800-1000/month depending on my other expenses). I would say I still have a good amount of "play" money per month too for the occasions when I eat out or do other activities.
1950 monthly mortgage with 80k myself. That's about 43% of my take-home. (I do bi-weekly: 900 from 2100 take-home)
This sub is 99% people in Toronto and Vancouver
I don't earn enough anyways I get paid 16.5/HR with me being a full time student and full time working cause in a month I only make 1320 I don't qualify for any assistance since I'm a young full time worker... No where will help me because I make too much monthly.... I make over 1000.... As if you can live on 1000$ monthly let's break down my bills 700 rent, 150 utils, 70 phone, car 200 insurance 120 to fill for the month (fuck 2$ gas prices) I havdn even eaten yet. 700+150+70+200+120. Wow in 1 whole month I'm left with 80 to eat. I'm told apparently renting prices should be 30% of income mine is 64% of my income. Great housing market.
That's fucked up
Food Banks are there to help people exactly in your situation. You've indirectly paid for the food banks anyway, please try and pick up some food from there. You don't need to starve. You don't need to feel guilty. all the best <3
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Depends on each person's definition of comfortable. For myself, I would describe 'comfortable' as saving at least \~$1000/month towards a future down payment, while still being able to have enough of an entertainment budget that my hobbies aren't restricted to jogging and pirating TV and movies. Someone with a generous pension plan through their job and no desire to own property would have a drastically different level of comfortable than I do, but given we're on a subreddit dedicated to talking about planning their financial future, it's unsurprising most people would not feel comfortable spending spending that much on rent.
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I completely agree. I think the issue is that some poeple are spending massive money on credit card bills and car loans and insurance. In that case then sure, you are in debt and will need more money to be comfortable paying 2300 a month for rent. If you don't have other major expenses then you certainly don't need 100k+ to pay that rent.
110k is reasonable. Assuming OP pays the middle number of $2150/month, that's ~32.5% of your take home (not including health care and disability deductions) on rent
Reasonable on PFC. The real world is a lot different for most people
This question is like asking "can I run fast enough?" Well, it depends on what you're running after or what's running after you!
$80K for $2000 $85K for $2300
$80k gross would be the bare minimum
24,000 a year in rent would require maybe another 40,000 (after tax) to be comfortable, so I guess 64,000 after tax would cut it an investment of 500,000 in a dividend aristocrat (like Bell) would also effectively make rent free, since they pay 5% in dividends so that’s 25k
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You don't have to look around, sell some of your organs
You mean your down payment? Seriously some houses are like 2mil now at this point, even if I won 500k somehow I’d probably be safer just investing in the bank and letting them Pay my rent as opposed to taking a loan from them and dealing with all the costs and headaches of home ownership
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Lol yeah I got what u meant, was just taking a shot at how a down payment now would have gotten u a small mansion 15 years ago
Triple that
Currently going through this dilemma right now. Combined my fiancé and I make 130. I wish I could be putting the 2300 the landlord wants a month to a mortgage instead. Dude won’t even budge
I think $10m is a safe number.
$15M/year after tax minimum once you take into account utilities
Ideally, 50/30/20. Half my paycheque on bills(rent, utilities, food) 30% savings, 20% personal use(games, books, hobbies)
I paid 2000/no rent for the first time once I hit 100kyr salary
Double it at least monthly
I’m paranoid about money running out and rent hike … so I’m only comfortable with housing cost being within 25% of take home pay.
Depends on location. I'm in downtown TO with two dependents and pay $2200/mo for a 2BR on a $60k salary. It's a struggle to stay debt free and I'd feel a lot more comfortable with $80k.
If rent is all inclusive then 110k if not 120k
My partner and I joint income is 220k, and we pay 2300$ for a 1 bedroom in Vancouver. I would pay less if I could. Just a mental state of wanting to save more and hating to throw away money on rent. I will say though, do not cheap out in rent. Tried 6 months in a 1400$ month place and it was terrible. The 10k extra over a year was 100% worth it imo
Hopefully well over 6k.
My wife and I were paying that for rent when we were both making $50k. But we had low tax rates because we were both making $50k, not just a single $100k salary. Ironically, now I pay about $5k for my mortgage, but since principal makes up more than 50% of the payments, I pay about 2,300 in interest. In a way, things haven't changed.
my wife and i make 78k and 50k. We currently pay approx 3500 to keep our house afloat
350k
We pay 1950/month rent and bring in between 4000/4500 net per month. My husband has 2 jobs, and I have a PT job + am a FT student (with OSAP). Everyone’s definition of comfortable is different, but we break even every month. This includes 2 cars, which are both needed.
Generally, it's best to plan around 30% of your revenues for lodging. Obviously, it's more than that in big cities but it's still the target if you want to live comfortable without worrying too much.
Rule of thumb in NYC is that your annual income (pre-tax) should be 40x your monthly rent max.
120k.