Family Formation & Housing

For young couples starting families, buying their first home and/or other real estate. Covers mortgages, credit cards, interest rates, children’s education savings plans, joint accounts for couples and the like.

The Art of Frugal Family Living: Balancing Quality and Budget

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Image Pexels/Alex Green

By Beau Peters

Special to Financial Independence Hub

Living frugally has become a necessity for many families as of late. Uncertain economic conditions and inflation may well have led you to take a long, hard look at your finances. While the situation may not necessarily be bleak, being a little more mindful about your family budget can be a wise precaution.

The good news is that living on a budget doesn’t have to mean sacrificing quality. There are steps you can take to live frugally while ensuring your family still has the support and personal enrichment they need.

Enhancing Meals

Cutting down on food spending is considered a key way to live frugally. Yet, frugal eating has something of a reputation for resulting in bland meals or lower-quality ingredients. This doesn’t have to be the case, though. It can take a little extra creativity and planning, but you can provide nutritious and delicious food options for your family without breaking the bank.

It’s important to recognize that lower-cost high-quality meals tend not to come from improvisation. You’ll find you get the best results by arranging meals in advance. Take a little time each week or even every month to make a meal plan. Start by considering the ingredients you already have at home and what additional ingredients could be added to these to make good meals. If possible, collect coupons or online codes from local stores and find ways to utilize these in your meal plan.

When you’re at the grocery store or shopping online, try to make strategic decisions. Purchase in bulk wherever possible and focus on a good selection of less-perishable items, such as canned goods, rice, and pasta, among others. This doesn’t mean you have to solely rely on these for all your meals. However, these elements do provide you with a frugal and adaptable foundation on which to build your meals.

Another important component is batch cooking and freezing. Meals such as soups and stews can be produced cost-effectively in large amounts. You can then divide these into individual meal-sized portions and freeze them. This ensures that your family has quick, nutritious, and cheap meals on days that you don’t have time to cook, rather than resorting to more expensive takeouts.

Enjoying Vacations

Living frugally shouldn’t mean that you have to sacrifice vacations. Everybody needs and deserves a break from the stresses of everyday life occasionally. Travel can also have a range of benefits for all members of the family. While you may not necessarily be able to afford luxury getaways, you can provide your family with enriching opportunities for fun and bonding. Continue Reading…

Lean FIRE (as opposed to Fat Fire)

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By Alain Guillot

Special to Financial Independence Hub

I was told on Twitter that living on less than $24k per year is very frugal. Maybe it is, but I would like to explain how I live on less than $24K and I feel that I live like a king. 

(Editor’s Note: The Twitter discussion below followed Monday’s Hub post on by Myownadvisor blogger Mark Seed: Is Fat Fire realistic?)

First of all, my net worth right now is about $500,000. If we use the 4% rule, I should be able to withdraw $20,000K/year ($1,667/month) in perpetuity.  

How I live  

Map of Alain’s neighbourhood in Montreal

I live in one of the best neighborhoods in Montreal. It’s called “Le Plateau Mont Royal.” I have a beautiful park 10 minutes walking distance to the east, and another more beautiful park 10 minutes walking distance to the west, and I have the Old Port, 20 minutes walking distance to the south. 

 

 

Alain on Duluth Street

 

The street where I live is pedestrian only; it’s a cobblestone street.

Because I have been living in the same apartment for the past 12 years, my rent is low. $815/month. 

One of my small pleasures is to go downstairs, to a little park on the corner and drink a beer with my neighbors. (beer from the convenience store $2)

My apartment is what’s called a 3 ½. One bedroom, one living room, a kitchen, and a bathroom. I live on the second floor of a two floor building. 

 

 

The local supermarket

I do my groceries at a small family-owned supermarket where I have been shopping for 12 years and where I know the cashiers and the owners by first name basis. Because I follow a plant based diet, I eat 99% of the time fresh fruit and vegetables. My grocery bill hardly exceeds $10 per day ($300/month). I buy my fruits and vegetables daily. 

 

Continue Reading…

A Financial Guide for the Sandwich Generation: Navigating the Challenges of Caregiving

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By Aman Raina, MBA

 (Special to Financial Independence Hub)

As an investment coach, my job is to educate and empower people with the knowledge to make informed investment decisions and set them on their journey towards financial freedom. However, over the last several years, I’ve found myself on a unique financial journey of my own.

Several years ago, my father was diagnosed with dementia. As his ability to manage his and my mother’s financial affairs began to diminish, I stepped into the role of their primary caregiver. This responsibility, layered on top of raising my two young boys, growing my investment coaching practice, and navigating a global health emergency, placed me firmly within the Sandwich Generation.

The Sandwich Generation refers to those caught in the middle of caregiving, balancing the needs of aging parents with the needs of their own families. According to a report by the Pew Research Center, nearly half (47%) of U.S. adults in their 40s and 50s fall into the Sandwich Generation. They are responsible for a parent who is 65 or older and either raising a young child or financially supporting a grown child.

In Canada, according to a 2020 report from Statistics Canada, around one in four Canadians aged 15 and older (7.8 million people) provided care to a family member or friend with a long-term health condition, a disability, or problems associated with aging. However, these figures likely underestimate the true prevalence of caregiving, especially in the context of the COVID-19 pandemic, which has increased the demand for home care.

With an aging population, these percentages are predicted to increase in the coming years, further magnifying the importance of addressing the challenges faced by the Sandwich Generation and all caregivers. It has been and continues to be an experience that has been for me mentally, emotionally, and physically stressful, filled with difficult conversations, worries about the future, and moments of feeling overwhelmed.

Despite my financial background, there were times when the responsibilities felt like a juggling act. The multitude of financial decisions to be made, from managing cash flow and long-term care planning for my parents to ensuring the financial stability of my own family, felt daunting. If I was experiencing this, I shudder to think what others who were not as well-versed financially were trying to cope?

Support from Caregiver Groups

In seeking support, I turned to various caregiver groups. It quickly became apparent that many others were grappling with the same challenges. They, too, were struggling to tackle the unique financial demands of being part of the Sandwich Generation.

From my experience, I found the core areas caregivers need to focus on revolved around these critical financial issues: Continue Reading…

How to Balance Saving for a Home and Starting a Family

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Navigating the financial challenges of saving for a home while starting a family can be daunting.

To help you find a balance, we’ve gathered ten insightful tips from CEOs, business owners, and financial experts.

From creating a realistic family budget to exercising patience and smart spending, let’s explore these strategies to help you achieve your financial goals.

 

 

  • Create a Realistic Family Budget
  • Leverage First-Time Homebuyer Programs
  • Reevaluate Spending Habits
  • Establish Separate Accounts for Goals
  • Prioritize Consistent Savings and Budgeting
  • Consider the “House Hacking” Strategy
  • Avoid Lifestyle Creep, Automate Savings
  • Trim Expenses, Seek Additional Income
  • Explore Alternative Homeownership Strategies
  • Exercise Patience and Smart Spending

Create a Realistic Family Budget

My top tip for balancing the financial goal of saving for a home while starting a family is to create a realistic budget. Take the time to review your current budget and account for earnings, current expenses, and estimates for future expenses. Kids are expensive: they can cost $20k or more in the first year alone. 

Your priority is to keep your kid safe, fed, and loved. Kids don’t care if you’re a homeowner. Once you have a good sense of what you’re doing with your money each month, put aside a reasonable amount each month to save for your home. 

If you’re a few months out from buying, consider investing the funds in something with a fixed interest rate, such as a CD. It’s safer than investing in the stock market and has a higher return than most savings accounts. — Jeremy Grant, Founder and CEO, Knocked-up Money

Leverage First-Time Homebuyer Programs

First-time homebuyer programs are designed to make homeownership more affordable and accessible. These programs provide benefits like down payment assistance, lower interest rates, or reduced closing costs. 

Research and identify the programs available in your area, offered by government entities or local financial institutions. Eligibility criteria may include income limits or credit score requirements, but many programs have flexible guidelines. If it all seems overwhelming, work with a knowledgeable mortgage lender or loan officer to navigate these programs effectively. — Mike Roberts, Co-founder, City Creek Mortgage

Reevaluate Spending Habits

Sit down and have a priorities conversation. Are you spending a lot of money in areas that don’t actually make you happy, just because you’ve always had the income to afford it? Just because you can, doesn’t mean you should.

Of the three to four things you spend lavishly on, what if you kept only one of those things — whichever makes you very happy to spend lavishly on it — and you downgraded the rest?

Every family can find at least one area of money being spent every month that doesn’t nearly matter that much to them but has become a habit. Which ones bring you true joy, and which ones have just become “the way we do it”? — Alex Boyd, Owner, Mindfully Investing

Establish Separate Accounts for Goals

The one tip I recommend for balancing the financial goals of saving for a home while starting a family is to have different accounts for each goal. I started doing this after reading The Richest Man in Babylon.

I started by saving 10% of my income, then divided everything else to pay for household bills and debts. After a few months, I increased this amount to 12%, then 15%, until I hit 35%.  Continue Reading…

Long-term Financial Concerns when moving to a New Region

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Image Source: Unsplash

By Beau Peters

Special to Financial Independence Hub

There are many reasons that people may move to a new state or province, including job opportunities, a change of pace, or wanting to be closer to family. However, one of the major factors in relocating is that where they currently live is more expensive than where they could be.

It’s easy to live in the now and make a drastic change because you believe the grass is greener on the other side, but you must also prepare for the future, and be aware of how your finances could be impacted when you move across state lines. Here are a few long-term financial implications you’ll want to keep in mind before you go.

Cost of Living

Some people move to another state because they like the weather or have friends they want to be closer to, but they’re shocked when they realize that the price of living is exponentially higher than the place they left. Some states have higher prices for the things we buy most, and the costs will likely stay that way for the foreseeable future.

We’re not just talking about the price of milk or groceries either. Costs can vary for many products and services, including healthcare, utilities, gasoline, etc. Before you relocated, research how the costs will affect you personally. You may want to reconsider if you know you’ll have a long commute to work and discover that you’d be paying 50 cents more per gallon of gas. Search online for a cost comparison calculator, which you can use to research the potential costs and make an educated decision.

Sometimes you must move for non-negotiable reasons, such as job opportunities or to be closer to family. If that’s the case and you know that the new state will be more expensive, then you may need to make some adjustments now to reduce costs — especially if you’re moving with young children. Though the actual process of moving with young kids can be difficult, there are ways to mitigate those challenges before, during, and after the move. Mapping out the route you plan to take ahead of time and arranging for childcare the day of the move are both ways to reduce stress during your relocation.

However, beyond the move itself, you have to be prepared for higher costs while raising your children, which may mean dealing with more expensive childcare, healthcare, and school expenses for years to come. These expenses shouldn’t necessarily prevent you from moving, but you should take them into account to ensure you’re making the right decision for your family and finances.

Taxes will be Different

Many people get excited because they hear that the cost of living is less in another state, but they often forget how taxes come into play.

One talking point that gets a lot of folks fired up is when a state doesn’t have an income tax. That’s the case in nine U.S. states, including Florida, Nevada, and Washington. However, you may not save as much money as expected because the states need to make that money up somehow. They often do so by charging more for sales, property, and estate taxes. If you buy a home, the property taxes can be a significant shock every year, so do your research. Continue Reading…