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A young couple plan their future: Member Money Matters

February 09, 2021

Future Sense

Meridian

Member Money Matters

Welcome to Member Money Matters - where we talk money with our community, our Members, and advisors. Conversations like these are essential to learning about your financial wellness, prioritizing your goals, and planning for the future.

Meridian Member: A young woman working in Mental Health and planning a future together with her husband.

Advisor: Talisa Simpson, Financial Services Representative

 

Life story and goals

Age: 26
Occupation: Addiction and Mental Health Worker
Location: Barrie, Ontario
Dependents: None... yet
Financial goals: Save up for a house and buy a new car

Expenses

Monthly after tax income: $5,500
Savings and investments contributions: $2,500 per month
Housing expenses: $733 (Our total rent is $1483, but we rent out part of the house for $750)
Utilities: $250
Transportation: $400
Staying connected (phone, internet, etc.): $90
Memberships and subscriptions: $0
Life Insurance: $0
Debt payments: $0
Other expenses: $400 to $600 donated to charity every month

 

Let’s talk money

What are your financial goals right now?

My husband and I want to buy a house and my car will need to be replaced in the next couple of years so I am also preparing for that. We also donate some money to charity each month.

When did you start learning about money?

I first started learning about money from my parents. I knew I would have to pay for university myself, so I needed to learn how to save and budget my OSAP and paycheques. Later, I learned more in-depth finances from workshops at my church. We used Excel to plan a monthly and annual budget. This year, I’ve been learning about the stock market and how to wisely invest for long- and short-term goals.

When did you start making a financial plan for the future?

I started thinking about financial planning when I got married 5 years ago. Since getting married, my husband and I have both gone back to school. For 3 years we had one full-time job between the two of us, so budgeting was super important. We worked really hard to avoid getting into debt - and we did it!

What’s your plan for meeting your goals?

About ten months ago, we started saving for a house, and for my new car. At the end of each month, we put $500 into our car fund and $2000 dollars, plus any extra money, into our house fund. We’ve been really consistent about that, and now we’re very close to meeting our goal. I’m investing the house money in the stock market each month - it’s been a great year for that, since I started in June and the market's been recovering from COVID. We’ve been working with Meridian to get a mortgage approval and our budget for the house will be $450,000. We have enough saved for our down payment, so now we’re saving for the additional fees that come with buying a house.

We have the car money in a TFSA, and we could technically use that for our house fund, but I’d rather leave it where it is in case we need to do repairs or replace my current car sooner than we planned.

Then, there’s the money sitting in our vacation account, which is available for emergencies. Since we aren’t going anywhere because of COVID, we may end up using our vacation fund for the house.

What’s your best saving strategy?

We make pretty much all of our own meals and we pack lunches. We also buy secondhand as much as we can and we drive older cars instead of buying new.

What was your latest splurge?

I bought a new-to-me ski coat for $50 that I probably didn’t need but wanted for the new season coming up. And my husband bought a $50 book he really wanted.

Latest unexpected necessary expense?

My car needed a few repairs. It cost us about $400.

Any other big plans for the next five years?

We want to have a baby in a few years.

 

Advice from an expert

Talisa Simpson, Financial Services Representative, offers advice.

Let’s talk about savings habits

You and your husband are off to a fantastic start! You’ve made realistic budgets and set clear goals that you work well together to accomplish. This is a great foundation for staying on track as homeowners.

Now, you should consider how you will change your saving patterns once you own a home. You’ll have more expenses, but it will still be important to save for your next car, home renovations, kids, and a well deserved post-pandemic vacation.

Of course, I cannot move on without commending you on your charitable donations. Meridian believes in giving back to our communities, and you two are a great example of how you can give back and still reach your personal goals.

Let’s talk about buying your first home

Buying your first home is really exciting. Like all big expenses, it's important to stay practical with your purchase price. Even if you can “afford” a home, consider that starting a family will also come with costs. Review your budget and make sure you have money set aside for unexpected events.

I recommend using a clear and detailed homeowner's budget to calculate what your future expenses will be. You want to be prepared for things like water, property taxes, and other expenses that you don’t currently pay as a renter.

Let’s talk about having a back-up plan

Before you buy a home, it's a good idea create a financial back-up plan, just in case. COVID has shown all of us how important that is, and right now you have the time and ability to set up those savings. Ideally, you’d have funds set aside to cover 3 to 6 months of your future expenses. You could open a separate high-interest savings account or a cashable GIC for this. Since you wouldn’t withdraw these funds for a while (hopefully), I recommend putting them in your TFSA, where they can earn tax-free interest.

I hope that helps! At Meridian, we’re always happy to dig deeper to make sure our Members reach their individual goals.

  Talisa Simpson headshot

All about Talisa Simpson

Talisa is a Financial Services Representative in Barrie. She enjoys getting to know Members on a personal level to discover their goals and challenges. Talisa works to find unique ways to help individuals reach their financial goals - cookie-cutter solutions are best kept to baking. Outside of Meridian, you can find her crafting, reading or, pandemic-permitting, hitting the road for her favourite live music venue.

 

The advice expressed in the article are for general informational purposes only and are not intended to provide specific advice or recommendations for any individual or on any specific product. It is only intended to provide education about the financial industry. The views reflected in the article are subject to change at any time without notice. Nothing in the article constitutes professional and/or financial advice, nor does any information on the article constitute a comprehensive or complete statement of the matters discussed thereto. To encourage safety, we recommend you to always consult with an advisor before making any decisions related to information on this website.

 

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