hi all

We are hoping to be in south Ontario, Niagara area next summer and are doing some preliminary checks for cost of living etc and wondering if someone can tell me if this sounds reasonable. i have researched wages, house prices, car ins etc and would like an opinion from people living at a similar level

we are a family of 4 - 2 adults 2 kids (3)(1)

looking to earn $25-$30 per hour
looking to buy town house for approx $220000 with $80000 down and mortgage for approx $140000
I plan to hold back $20000 for initial setup cost , car + insurance.

in the uk we earn approx £40k per annum combined, 80k mortgage, car 2 bikes, loans etc (up north) and are ok for money....

i know its hard to compare costs and also don't expect to come to canada to get rich....were coming for general life quality for us and our kids but if we cant afford to pay the bills then we are obviously in trouble...

my partner is a beauty therapist but we would have to pay child care for her to work. she would like to work and we are looking into it but we dont want to rely on the extra income. I am hoping my salary can support us...

i suppose im basically asking....

what kind of life can a family of 4 afford to have in south ontario, hamilton, grimsby, niagara area on a salary of $25 per hour and a mortgage of $140000.

thanks for any input!!!

I wouldnt fancy it, not long term. You didnt say what you do. (or maybe I missed it)

Would you get overtime too on top of that?

With a mortgage that big you would need to be bringing in 70-80k gross a year at least to cover expenses I suspect. Preferably more.

My mortgage is $100kish ($650 a month, 800 with the property taxes), I get paid ~70k We have two kids (2 and 6), two cars (1 car payment $300 a month), wife stays home. We have next to nothing left most months and are not living extravagantly. And thats after being established here with lower insurance rates etc.

YMMV of course, but thats how it is for us in similarish circumstances, on a lower mortgage.

oh poo....

thanks for that...

im a maintenance fitter and the job i do here is shift based and overtime is part and parcel of the job. I assume it will be the same in canada but i really want to work it out on a bare minimum...

i didnt expect it / hoped ot not to be quite as bleak as that......cheers anyway

maybe we had better look a lot more into my partners work options...

Too many intangibles to make a solid Yes/No case

For example, I'm stuck paying $300 a month for heating oil...your 240k hypothetical house is probably cheaper to run.... People with gas for example report $150 a month, so there are savings there. I drive to 25km to work, thats costing $100, maybe $150 a month in Gas. If you buy cars outright then thats $300 a month I'm spending that you dont have too, so all in all thats maybe $500 a month, 6k net, maybe $8 or 9k gross a year difference right there

It all adds up. Im sure people get by on less than me, and if thats startup income and will improve in the coming years, then you can make a go if it.

Im also not factoring in Child Tax benefit as we save that and its not part of our "income". Takes a while for that to come on stream though, so you wouldnt get that at first anyway.

thanks for that...

i think ill do a full and proper cost sheet...and look a lot deeper into the tax and benefits system.

luckily we have friends in grimsby where would also like to live, so we can go through all their bills etc....

suppose its as close as i though it would be to be successfull then.....made my decision to buy a car outright and pay as much upfront as possiible a sensilbe one..

cheers

stu

hi again...ive been adding some more costs...

opinions welcome as the outlook looks brighter than i imagined...

it is bases on minimum $25phr with no other income.

i worked out the following

earnings 25/ph after tax $3,284.04



mortgage 140k 6% $900.00
house tax $200.00
electric $70.00
water $50.00
gas $100.00
tv phone internet $150.00
food $400.00
car insurance $200.00
fuel $200.00
home insurane $50.00



outgoings $2,320.00


remaining $964.04
weekly $222.47

this leaves me with approx $200 per week for clothes, treats, days out, takeaways, meals...etc..

also this is a minimum and i would hope to have more based on overtime and partner income. we probable have around £200 left over here in the uk so it seems very similar to me...

how does this sound to all you pros......have i missed something obvious....etc......suppose it depends on what your used to but at first glance, it dosent seem as bleak as i first thought.

cheers

stu

At $25 per hour a take home income of $3284.04 per month seems very optimistic.

How many hours are you planning on working?

A good rule of thumb I believe is to take your gross income and reduce it by 30%-33% for a take home salary.

Couple of observations to throw in the mix...the numbers mostly look to be in the ball park, but;

I spend $150-200 a week on groceries for my similar family, without too many extravagancies.

Hydro One will charge you about $60 a month for electricity before you even use a watt. Its an Ontario thing, debt retirement etc. Cant escape it. We pay about $130 a month typically.

Property taxes...could be more, hard to say without having the house / district picked out.

Fuel costs could be anything...could be a 50% swing in any given year. Now its 93c/l, 3 months ago it was pushing $1.40.

For overall annual tax burden try the calculator at www.taxtips.ca
http://www.taxtips.ca/calculators/taxcalculator.htm

$25 x 40hrs x 50weeks =50k gross

single income, married , two dependent kids = $40,300 = $3336/month
This is not taking into account any child tax benefit / UCB coming in in the short term.

Bare in mind you want to be saving for kids education as soon as possible, and also for retirement if this is going to be a long term stay.

I would say that your figures are rather optimistic (your food estimate at $400 per month seems particularly unrealistic for a family of four!) - but I have no experience of living in Canada yet, I'm just going on other threads I've seen. I've just done a search of the forums for cost of living threads and the first good response I found was this one from NSpaul in which he details his cost of living in NS (without a mortgage). It might be useful:

Property taxes (based on a $250k house) = $3,500/year
Heating costs (assuming oil central heating) = $4,000/year
Electricity = $2000/year
Phone/CableTV/Internet = $1,200/year
Cellphone = $800/year
Groceries (for family of 5) = $10,000/year
Gas (Petrol) for 2 cars = $4,500/year
Insurance for 2 cars = $2,500/year
House insurance = $1,500/year
Clothes, household goods, general spending = $3,000
Eating out occassionally = $1,500/year
Kids sports and activities = $1,500/year

Do have a hunt for other threads as lots of them have exact figures in to give you a better idea. And bear in mind that most people on here say that the cost of living in Canada isn't any cheaper than in the UK so you may be better off just assuming you'll spend the same i.e. whatever you spend in Tesco's each month, assume it'll be roughly the same in Canada.

Hope that helps.

huge huge variables on this even within the same province

my car insurance fully comp for two drivers is $674 a year

my property tax is $632 a year

heating for a year oil/wood $1450 snd we are at home all of the time so ( large)home is always toasting warm

home insurance $590 includes contaents of $250000 ( we havent
got this amount of contents but this is how it works in canada)

elec bill is between $75 and $90 a month

good luck all

I pay that every month

I thought you were selling that place.

Also take into consideration that provincial health care insurance (Canada's pared down version of NHS) does not cover dental care, prescription medication and prescription glasses.

Some employers provide supplementary medical insurance as a benefit (or let you subscribe, at your own cost, to a group plan that has more favourable premiums than you could get on your own).

Even when you have supplementary medical insurance, there usually is a co-payment. That is, you have to pay a modest amount, and the insurance company picks up the rest of the cost. But these modest co-payments can add up.

In another thread you mentioned that your partner had Crohn's disease. If she were to become ill and need medical treatment, Ontario Health Insurance Plan (OHIP) would cover her visits to doctors, lab tests, hospital stays and surgery (if she required any of these). If drugs were administered to her in hospital, OHIP would cover them. But, if she took prescription medications at home, OHIP would not cover the cost.

I believe you also need to consider whether or not you'd have a support system if your partner became ill. How would you cope with your job and the kids?
x

In addition to Judy's excellent response I don't see any savings for retirement in your budget.

Canada Pension Plan (CPP) and Old Age Sercurity will not under any circumstances adequately cover your needs in retirement.

I calculate it at $3,412.17 per month assuming working 40 hours a week for 50 weeks and 2 weeks vacation (and all paid stats).

It is an effective total tax rate (including CPP and EI) of 21.26%. I think you are too pessimistic. For most wage earners think about losing 25% is closer for a rough guide.