Monday, June 24, 2013

money goals, and deadlines

Every couple, family and tight friendship group has their own little shorthand phrases, I think. The references to all the inside jokes that occur when you spend copious amounts of time together so that suddenly "pop a can" is the most hilarious reference anyone can bring up. The sort of weird, odd humour that you had to be there when it first came up to understand. The same catch phrases can be discrete reminders of goals, or small ways to comfort each other.

"Tax time" has become one of those for Bunny and I. We are crazy excited about paying next year's taxes. Weird, right? Except in our case, tax time is a reference to a very specific goal we are trying to meet and seem pretty on target to do: buying a house. The way our earnings and savings have been going lately we are very confident that by tax time next year we will be financially ready to do that.

We have a pretty lofty goal: paying 25-33% down, and we're looking at buying a starter type home. (Although both of our parents have lived in "starter homes" for about twenty years, so to us it's the size of home we know and grew up in). There's a decent chunk of that available to be borrowed from RRSPs, and despite some hesitations on my part we will be taking advantage of that program. Our bank accounts are growing pretty rapidly, and what seems to be a very achievable goal is to buy a house after we pay the next year's taxes.

Which means that we have to have our downpayment. It means we have to have paid off taxes (and because of freelance work, we will owe money, so we have to plan for that). It means having our closing costs ready, and leaving our emergency fund intact. We're getting there pretty steadily. Between what we currently have saved, what we have in the RRSP, and what we're expecting to be able to save over the next six months we will be buying a house once we've paid our 2013 taxes. And that? That's huge.

I may have in the past mentioned that I am known to kind of freak out about our living situation, tears and all. When we're getting frustrated reminding ourselves that our end goal is to buy after we pay the next round of taxes? That's a huge stress reliever right there. Tax time isn't so far, and I swear you've never known anyone so excited to pay their stupid taxes.


  1. The RRSP thing is genius, from a tax perspective. You have to pay the money back, but slowly (20 years, I think?), so as long as you're putting more than that min in a year (which for me is like $300) you're still saving. And the savings on mortgage interest is totally better than the rrsp income, at least in my case.

    Canada is awesome.

    1. It's definitely got a lot of benefits, and all things told I would rather borrow from ourselves than borrow from the bank. Where I go all squirrely eyed is worrying that we are already behind on retirement savings, and we're losing out on a lot of compound interest and adding to our monthly expenses by doing it.

      It's still the right decision, but money is my top stressor and I know it.

  2. This is super exciting, slowly, but surely, you are getting there :)

  3. I really like that you're so adamant about putting down a considerable amount of the purchase price for the home you want. It's so uncommon to pay down even a single cent here, that our country's total mortgage burden is ridiculous. Way better to do it the way you do it.

    Is it a buyer's market in your region, or are there more people ready to buy than the supply of houses allows?

    1. I'm nervous even about the amount of mortgage we're planning on carrying. It's a lot of debt, and we're going to have a lot of other expenses. But there are ways of keeping the mortgage payment to about $650 a month, which is manageable. I'm super debt averse, so this informs a lot of the decision.

      It's a soft seller's market here, but the areas that we'd be looking are less popular so we'll have a little extra luck. The city is a bedroom community of Toronto, and most buyers are looking for an easier commute from the newer areas of town, and our family and my job are all on the far side of the city, so we'll be looking for a home in the older areas of town which gives us a bit of a leg up.