Port folio / rrsp question / first time buyer
 

need some help. I have been saving for a little while now and im looking to buy my own place in the next 2 years. I have been preparing myself by increasing my credit score to 800, paying off all my credit debts, making sure credit cards never had any late payments in the last 5 years. I have made a lot of sacrifices to accumulate $10,000 in tax free savings account.

I got $2,000 in chq account that I want to invest. I just don't know where to put it. I do not have RRSP's and was wondering if I should put the whole amount in asap. Will I receive some money back from the government after putting $2,000 into a RRSP account? if so then how much?

I actually do owe a little bit of money to the government for withdrawing my rrsp's(wedding $$$). Will they automatically keep any money that is coming my way?

now to some questions about buying a home. How much money ($10,000-$20,000) should I put down when buy an apartment/condo. I'm looking to spend around $299,000 - $350,000. I know I have a excellent credit score/history that would get me the best possible rate but can I afford it on my $17 hrly wage rate(just started a new job) I don't make much money due to lack of education but have compensated by working on my port folio (raising a family at a young age).

I don't want to get into my personal goals that include upgrading my skills for better employment opportunities, I just want some advice. Is anyone here in the same boat? I love my wife and son and want what is best for them.

P.S

Damn life is challenging, but the reward is great when challenges are accomplished.

to0N.

1) top up your rrsp balance to $25k max (so you $25k, your wife $25k for a total of $50k)

http://www.cra-arc.gc.ca/tx/ndvdls/t.../menu-eng.html

-putting money into RRSP will bring down your taxes and potentially get you a refund

2) have you thought about RESP (for your kid)?

-put money into an RESP for your kid and receive grants from the government (max of $500 grant / year)

http://www.cra-arc.gc.ca/E/pub/tg/rc...2-e.html#P9_59
http://www.canlearn.ca/eng/saving/cesg/index.shtml

go in and talk to the bank

the can show you with numbers and explain things you dont understand as well answer any of your questions.

I went last Tuesdau and I'm glad. Opened up a RRSP


oh and on the buying a place I believe they say you should at least have 10% of what the place cost as your down but the more the better

first off -

Props to you Toon, that's manning up. Which frankly on RS doesn't happen to often.

From the looks of things, when you withdrew money to pay for your wedding already the withholding taxes should deduct, plus your income. So technically if this was last year, and you paid off all your taxes. Then i wouldnt worry about it.

Imho, I would highly suggest you keep that 2000, into a savings account as a rainy day fund. Your TFSA seems like your DP so thats a different account. If you keep the route you're going, you would only have 2000-3000 in your saving for rainy day. You still put money down into your TFSA, as your DP.

Seems like things are pretty in order for you. Keep at what you're doing and it's gonna be dandy.

Another suggestion would be if you have an accountant friend, run numbers by him, just a quick fyi for yourself, taxes you have need to pay, or refund, for this upcoming year. then the 2000 can be decided accordingly if you wish to do smething with it.

Sounds like you have worked hard, please don't spoil that with some bad decisions now.

Not much. You're in a low income bracket and probably use many of the deduction available for a family. I'd guess maybe 20%.

My advice will be harsh, yet its not to put you down. Its to show the reality of what problems your family may face:

If you're making $17/hr at job that requires little education, you're replaceable or expendable. That $2K should stay in a rainy day account to provide for your family. Infact with a family you should have 3-6 months after-tax salary in your rainy day account, or $6-12K. Thus your savings and TFSA are good for a rainy day. Now its time to focus on getting a better job and saving more for a house.

If you were to buy, you're buying way outside your price range:
$17/hr * 37.5hrs/week == $33K/yr

Thus you are looking to spend 10x your income on a house. The recommended average is 3x. I'm OK with 4x, yet 10x is not smart. You're taking on more debt than you can handle.

Your mortgage payment would be $1500/mn on $300K plus property taxes, so you'll be spending $20K/yr of your $33K/yr salary on housing. How will your family live off the little that is left?

You've already shown you're bad at making financial decisions. A wedding is nice, yet not if you have to empty your savings or go into debt to do so. Emotions should not trump finances.

Please do what is best for them: rent.

Renting has a bad stigma. My parents rented when I was young. My childhood was not noticeably different cause I played on rented floors, slept in rented rooms and ran on rented grass than my friends who parents owned. My parents had more disposable income and mobility, which eventually did allow them to find better jobs and buy a house.

there is no way you are goin to get a 300-350k condo on 17/hr.... unless your wife is also working and making around the same.

a single person would need to be making 50-55k / yr for a bank to give you a 300k mortage.

To put it into prospective, I'm in a similar situation to you. Im 21, have roughly 15k saved, another 9 in rrsp, and then 2 in chequing. For the past 2 months i've been looking at purchasing a condo myself. I live outside of Vancouver, so the prices are much cheaper. With the money I have saved I was pre-approved for 310,000. I make 26.80/hr which to some people seems like a lot, but really is peanuts. Sitting down with a women at the bank really opened my eyes to all the expenses, I was looking at buying a condo for under 200k. Minimum down is 5% which is 10k. With the minimum put down, I was looking at roughly $1100 a month, not including stata which many people forget about, which can be in excess of $250 in some situations. With all other bills; car insurance, gas, food, hydro, and the list goes on I wouldnt have much left over to play with. Keep in mind, if you a car payment, or anything like that it could be much more difficult.


Hope this makes sence, its 3am, and Im about 14 beer deep.