Changing careers and moving cities to afford a home - is my budget feasible?

[keyboardguy23]

I'm currently living in the GTA, and I work in private industry. I am expecting a job offer with the federal government in Edmonton. I am inclined to take this job because it will allow me to move to an area where I can buy a bigger home - I don't like paying so much for rent for the small condo I currently live in.

Here's some information about me:

-Single young man, age 30, no kids. Professionally designated accountant by profession (with a niche specialty).

-Don't spend much on entertainment/going out. My only entertainment is eating out 1x/week for $20, and extra cable channels

-No debt

-Plan to buy a newly constructed duplex about two years after moving (I'll rent at first). It'll be in a sprawling suburban area.

-Job will pay about $90k gross, and will have defined benefit government pension. After all deductions (10% pension deduction, CPP, EI, and taxes), monthly, net pay will be $4,750 (I used a payroll calculator to figure this out). Pay will rise by an average of 3-4%/year (it's a unionized job with a set scale).

-Home costs will be the following (based on today's prices and the financial resources I'll have available):

a. Mortgage: $1,500
b. Property taxes: $300
c. Utilities (power, water, and heating): $300/month average
d. Insurance: $75

Total housing: $2,175

-This leaves me with about $2,500 left. Here's what I'm thinking my costs will be (I'm being conservative here):

a. Groceries = $400 (I'm young and active, and I eat a lot)
b. Personal care = $100
c. Gas = $300
d. Car insurance/registration: $80/month (I drive an old car and only have basic insurance).
e. Car repair: $50
f. TV/internet/phone: $200
g. Eating Out: $150
h. Parking downtown at work: $200
i. Home maintenance: $200 - I'll put this amount aside every month and invest it conservatively so I have money towards a new roof/boiler/upgrades when the time comes
j. Clothes = $100
k. Furniture/household items: $200 (need to build up still)
l. Vacations = $200/month.

Total: $1,980 for everything else besides housing

Remainder: $445

 

[jjp297]

@keyboardguy23 Your housing costs seems reasonable, but I am more concerned about your retirement statement "I don't think I'll need to see for retirement". As good as the fed's pension plan is, it could always be reduced or changed. At a minimum, you should open a TFSA and put in a diversified ETF portfolio and max it out. This is a fully tax free account when you withdraw and you can use it to: pay down mortgage, buy a car, vacation to Bora Bora, or keep for retirement.

 

[drewmarshall]

@keyboardguy23 Your net pay is too high... at least for months that only have 2 pays... I am a federal public servant and I get to keep somewhere around 65% of my gross.

I also think your mortgage amount is too low, depending on how much you are able to put down.

Otherwise, Edmonton is awesome i lived there for 10 years and love it !

 

[mushroomsauce]

@keyboardguy23 Budget aside, one thing to consider is a possible future move to Ottawa. Much more upwards mobility there than a region...

 

[keyboardguy23]

@mushroomsauce Exactly - one of my peers transferred from Edmonton to Ottawa after 2 years of doing the same job I’m planning to take.

But I don’t know if it’ll be worthwhile moving to Ottawa - maybe it’ll be better just staying in Edmonton for good, settling down, and paying the mortgage off. Moving can get expensive. I can move up in Edmonton, but there are fewer opportunities.

And isn’t Ottawa more expensive than Edmonton for the same standard of living? It may not be worth the potential extra pay in Ottawa to leave Edmonton.

 

[theokritos]

@keyboardguy23 You didn’t mention the purchase price and how much you will have for a down payment but I’m thinking $1,500 a month is low for a mortgage payment. Either that or if you’re looking at a condominium you’ll need to account for condo fees. Also, if you’re buying a house, $75 is probably low for home insurance. Might be up around $150.

 

[blessed2017]

@keyboardguy23

Note: I don't think I'll need to save for retirement since I'll already be contributing 10% of my pay towards my defined benefit pension. Plus, my employer will be contributing another 10%.

Never rely on anyone else for your future. If you are not saving for retirement, you are not going to retire.

 

[deepblues36]

@blessed2017

Never rely on anyone else for your future. If you are not saving for retirement, you are not going to retire.

That's absurdly harsh and demonstrably untrue for multiple generations so far.

 

[blessed2017]

@deepblues36 I guess if you feel lucky or just plan on sitting at home waiting to die during retirement you could be ok not saving.

 

[deepblues36]

@blessed2017 You need to feel lucky to think the federal government pension, which is considered fully funded at the moment, will exist when you retire?

You have a small pessimistic streak in you I think.

 

[blessed2017]

@deepblues36 You can't predict the future. You can't rely on anyone or anything but yourself to make sure you get to where you want to be.

 

[deepblues36]

@blessed2017 Ok this is going nowhere.

 

[blessed2017]

@deepblues36 It is. There is nothing left to say. I didn't rely on anyone else and I am already"retired". Don't have to worry about money. Not even 30 yet.

Continue doing what your doing if you believe the government is all you are going to need 60 years from now.

 

[deepblues36]

@blessed2017

I am already"retired". Don't have to worry about money. Not even 30 yet.

Right, I'm sure. Say "hi" to your mom for me when she comes downstairs with your snack.

 

[blessed2017]

@deepblues36 Jealousy is not a good look.

 

[deepblues36]

@blessed2017 Hardly. I actually lived in my twenties.

 

[didyousaysomething]

@blessed2017 with that line of thinking, the only sure way to save for retirement is to stash the money under your mattress since any other form of savings is relying on other people.

 

[blessed2017]

@didyousaysomething If you want to be stupid about it, sure you could do that.

 

[didyousaysomething]

@blessed2017 so what is the only way to save for retirement that relies on no one else but yourself?

fyi investing in stocks is still relying on other people. its just self managing your reliance on other people instead of having someone who has training at it do it for you.

 

[blessed2017]

@didyousaysomething You are thinking too hard.