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“When I looked at the situation and the opportunity for them to do it now — it wouldn’t be advisable,” said Lucreziano. “They’re close, but they need that extra push.“
So why doesn’t Adam just make up the difference with an extra pay raise? Well, Lucreziano calculated that even if Adam boosted his salary to $165,000 per year — a number not likely sustainable for him — that still wouldn’t make up the difference.
The couple has about $63,000 between their TFSAs, chequing and savings accounts. After the pay boost, Lucreziano estimates their savings could hit $140,000 by 2022. And although they would be able to harvest some capital from the sale of their current home, on which they still owe $224,277, Lucreziano calculates there would still be a shortfall over $30,000.
When I looked at the situation and the opportunity for them to do it now — it wouldn’t be advisable
Carissa Lucreziano, CIBC vice-president of financial planning and advice
Amelia and Adam have to think about more than the $154,534 downpayment they’d need, she said. There would be closing costs of $15,759 and property taxes of $7,354.
There is also the $12,608 Lucreziano has estimated the couple will spend on their second child to consider. It’s generally estimated that raising a child in Canada costs between $10,000 and $15,000. That figure includes all the basics: food, clothes, health care, transportation, school supplies, etc. Child care would likely cost them an additional $6,000 per year (although in some provinces, such as Ontario, that number can climb well above $10,000).
Amelia and Adam shouldn’t consider buying a $750,000 home and having a second child before 2024, when they’d comfortably be able to afford both after more than three years of accumulating savings, Lucreziano concludes.
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