BUDGETING YOUR EXPENSES
Renting a Home
In our area, it's pretty expensive to live. The amount you pay in electricity will depend on many factors, such as the size of your apartment and how new it is (better insulation means less waste of energy. For our purposes, pick one of the amounts below.
A good rule to follow is, your accomodation expenses should not be more than 1/3 of your salary every month. Sometimes, this is hard to do, but try to do this anyway, to avoid being "house rich and money poor". That is how you get in trouble!
A good rule to follow is, your accomodation expenses should not be more than 1/3 of your salary every month. Sometimes, this is hard to do, but try to do this anyway, to avoid being "house rich and money poor". That is how you get in trouble!
1-bedroom apartment: Rent $2,100/month — Electricity $100
2-bedroom apartment: Rent $3,200/month — Electricity $140
3-bedroom apartment: Rent $4,300/month — Electricity $180
2-bedroom apartment: Rent $3,200/month — Electricity $140
3-bedroom apartment: Rent $4,300/month — Electricity $180
EXTENDING: Please go to Zillow and find an apartment or house on our area, link this home to your project sheet and use the price of the rental in your budget.
Food
Here is some basic information on groceries to help you with your budget.
Budget Bites: $400/month (basic groceries, no eating out)
Balanced Basket: $750/month (decent mix, some takeout)
Premium Pantry: $1,000/month+ (organic, fresh, eat out often)
Balanced Basket: $750/month (decent mix, some takeout)
Premium Pantry: $1,000/month+ (organic, fresh, eat out often)
EXTENDING: Please go to the grocery store and make your own food grocery list for the month, with prices!
Other Expenses
Cell Phone Plan: $60/month
Internet: $85/month
Cable/Streaming: $50/month
Transportation: see below
Walk/Bike: Free
Bus Pass: $60/month
Car (insurance + gas): $400/month
Car + Downtown Parking: $600–700/month (many work places offer free parking)
Internet: $85/month
Cable/Streaming: $50/month
Transportation: see below
Walk/Bike: Free
Bus Pass: $60/month
Car (insurance + gas): $400/month
Car + Downtown Parking: $600–700/month (many work places offer free parking)
EXTENDING: Please be specific on your cell phone plan, with prices and providers, as well as internet providers. Do your work -- with prices!
Optional
Entertainment (movies, concerts, etc.): $100–300/month
Clothing: $50–200/month
Pet Care (if you have a pet!): $100/month
Emergency Fund Savings: $100–300/month
Vacation Savings: You choose the amount, depending on where you are going!
Clothing: $50–200/month
Pet Care (if you have a pet!): $100/month
Emergency Fund Savings: $100–300/month
Vacation Savings: You choose the amount, depending on where you are going!
EXTENDING: Be as specific as possible. Planning a trip to Paris? Use this in your budget. Have a chinchilla? Use this in your budget.
Buying a Home
Buying a home? Alright! But the bank doesn’t give mortgages for everyone.
They will follow a few steps to make sure you will not default on your loan (if you don’t pay a loan, it’s called “default”).
Take a look at your salary. How much can your mortgage cost be? Let’s find out!
They will follow a few steps to make sure you will not default on your loan (if you don’t pay a loan, it’s called “default”).
- The bank is going to ask you to bring a down payment, or a portion of the house value as a gesture of goodwill. If a home costs $400,000.00, the bank will want you to bring them $40,000.00 as a down payment. This means the bank will cover the remaining $360,000.00. This amount will be your MORTGAGE.
- The bank will check your credit score, to see if you are financially responsible and pay your bills on time. (see credit score section for info!)
- The bank will ask for your proof of salary. If you are married, both salaries will be looked at. The bank will only allow you to purchase a home if the mortgage payment plus heating and condo fees will be 30% or less of your monthly income after taxes.
- The bank will ask other banks and see how much you owe people everywhere. If you owe a lot of money, this counts against your ability to get a home.
Take a look at your salary. How much can your mortgage cost be? Let’s find out!
Go to this website and use their mortgage affordability calculator:
https://www.cibc.com/en/personal-banking/mortgages/calculators/affordability-calculator.html
Are you able to afford it? Good!
If not, then aim for a lower price for a home. You can always buy a “starter home” and build your assets from there.
Now, use the mortgage payment amount that the calculator gives you. This will be your mortgage expense. Depending on how big you want your house to be, how much would it take for you to save this amount?
You should be realistic and be careful with what you choose. Below are some figures that can be used as a baseline, but if you want to be more specific (and have fun looking at houses!) please continue to the bottom of the page.
https://www.cibc.com/en/personal-banking/mortgages/calculators/affordability-calculator.html
Are you able to afford it? Good!
If not, then aim for a lower price for a home. You can always buy a “starter home” and build your assets from there.
Now, use the mortgage payment amount that the calculator gives you. This will be your mortgage expense. Depending on how big you want your house to be, how much would it take for you to save this amount?
You should be realistic and be careful with what you choose. Below are some figures that can be used as a baseline, but if you want to be more specific (and have fun looking at houses!) please continue to the bottom of the page.
1-bedroom condo: price of $400,000 — Down payment $40,000
2-bedroom condo: price of $600,000 — Down payment $60,000
3-bedroom condo: price of $800,000 — Down payment $80,000
2-bedroom condo: price of $600,000 — Down payment $60,000
3-bedroom condo: price of $800,000 — Down payment $80,000
After figuring out living accomodations, you will have money leftover for saving, food and other expenses. Many people choose to spend more in food, while others like to be able to take vacations out of the country every year. Depending on which is your goal, you may need to adjust your food budget!
EXTENDING: Please go to Realtor.ca, find a home you like, and link the home to your sheet. Use this amount for your mortgage calculations.
