This article is a follow-up to “Is Tiny Living for You?” 

Despite my affinity for the tiny house lifestyle, I found that buying a tiny home, especially as my first property, didn’t make sense once I dug into the numbers. 

One of the main reasons I was interested in a tiny home was to accommodate a more affordable lifestyle. However, it turns out that the economics of buying a tiny home isn’t as attractive as I thought. Let’s examine how I came to this conclusion.

To illustrate, I’ve drawn out two options below: a tiny home vs a one-bedroom condo. 

One benefit of going tiny is that there are no closing costs such as legal fees, home inspection, etc. These costs have not been added into the total loan amount equation above since they’re incurred up-front. These should still be considered.

#1. Interest Rate & Max Term 

It is no secret that interest rates are currently low. On a mortgage, you can find variable rates below 1.5%, and fixed rates at around 2.5% for most. Bankers may try to suggest this all the time, but right now really is a great time to buy.

For tiny house financing, it took me a little extra time to find an agent that had experience with this type of lending. Once I did, the best rate the agent could offer was 5.5% on a 5-year fixed (August 2021). 

Note: the maximum available term on a tiny house is 20 years, regardless of the lender you choose and some may only offer 15 years.

#2. Cost of Borrowing: Initial Term and Total Cost

Over the initial five-year term, the difference in total interest paid is significant.

If rates remained unchanged for the entire term of both loans, the difference in the total cost of borrowing is not as significant: $97,627 (tiny) vs. $89,091 (condo) for a difference of $8536. Over two decades plus, this wasn’t a huge factor in my decision. 

You’re welcome for the unsolicited painful reminder of how much we pay for access to homeownership. If you’d like to torture yourself with this math on your own time, feel free to use this mortgage calculator that comes with a comparison function.

Keep in mind – with tiny homes increasing in popularity, it is very possible that interest rates could improve for these types of dwellings relative to traditional mortgages over the next decade or two, especially if/when a resale market establishes itself. For now, we’re just working with the numbers we’ve got – not what we hope they might someday be. 

#3. Monthly Cashflow Requirements

Monthly cashflows were ultimately the most important factor in my decision. As you can see, there is a pretty significant divide between the two options. 

• The comparison between the mortgage and personal loan is pretty straightforward. 

• For the condo fee, I used the amount I will be paying for my 500 square foot condo in year one. The fees include all utilities except electricity.

• For the tiny home, I had a tentative agreement in place for a place to put it for $400/month + $150 for utilities.

• Insurance costs are not factored in here, but they are roughly equal for these two options.

#4. First-Time Home Buyers Plan (HBP) 

If you’ve put serious consideration into buying your first home in Canada, odds are, you’ve come across this incentive. If you haven’t, feel free to click on the link in this paragraph’s heading to learn more.

Essentially this program allows you to access funds from your RRSP (up to $35,000) tax-free if you are withdrawing for the purpose of purchasing your first home. 

This is not free money, but it is your money. You must pay back the amount you withdrew. It is an attractive option because you will not pay tax or interest on it so long as you make your annual payment on it on time and in full. You have up to 15 years to pay it back.

If you are looking to buy a tiny home, this incentive will not be available to you. Your loan will be treated the same as if you were buying a recreational vehicle and will be classified as a personal loan, not a mortgage. Since a large portion of my savings were held in an RRSP, this played a big role in my decision.

#5. Taxes & Fees

In addition to the cost of the tiny home, since it is a new-build, you’ll also have to pay GST of 5% (in Canada) and potentially PST as well depending on where you live. 

The builder I was leaning toward working with said the average cost of the tiny home model I was interested in was roughly $150,000. 

You can build a tiny home for significantly less than this, even if you go with an established builder such as Tea Cup Tiny Homes. Tea Cup has designs suitable for a budget of around $100,000. However, I wasn’t willing to buy something without the style and functionality that I would be happy living in. I also wanted the ability to use it as a vacation rental property long term so I wasn’t going to compromise any features.

If you peruse Youtube or have dove deep into the world of tiny house documentaries you’ve probably seen that you can technically build your own tiny home yourself for $40,000 – $100,000. You’ll of course require the skills and location to build it yourself – neither of which I possess. Also keep in mind that even if the DIY approach is an option for you, financing will be a different challenge as it will likely come in the form of a personal line of credit with less of a collateral guarantee from the lenders perspective. 

#6. Re-sale market

I did look at buying a used tiny home, but I didn’t look for long. The reason being is that most banks will not give you a loan to purchase a “pre-used” tiny home, at least none that I spoke to. This could change, but for now, that’s the reality. 

If you ever needed to sell the tiny, the pool of buyers would be limited mostly to those with the ability to pay in cash – shrinking the likelihood that you’ll be able to sell it quickly if needed.

Even if you do find a buyer, just like a vehicle, your tiny home will depreciate the second you buy it. You likely wouldn’t purchase with the intention of selling it in the first few years, but if unforeseen circumstances arose and you needed to sell shortly after buying it, you’d be out a bunch of money and probably wouldn’t have enough to repay the loan.

#7. Other factors: Moving, Commuting, Unforeseeable Costs

Moving the Home

Beyond just the initial move, capitalizing on the portability of the tiny home requires you to have a vehicle capable of towing it. You might be able to use a friend’s vehicle, but then again you might not. You might just say “Oh well, I’ll just buy a bigger vehicle with the towing capacity to have the option of towing it”. Guess what? Yet another cost. Same story if you’re considering renting a vehicle when you need to move your tiny home on wheels.

Commuting Costs

For most, switching to tiny is likely accompanied by a move further out of town. Most city bylaws make it difficult to station a tiny home in the inner city. 

For me, my commute into the city for work would have been 43KM, 2-3 times per week. At the provincial km expense rate for cost and depreciation on a vehicle($0.59/km), I’d be looking at monthly commuting costs of $275/month plus the additional time spent on the road.

Overall it is not an easy or straightforward process to get yourself into a tiny home. As much as I have researched, I am still willing to acknowledge that until you actually do something, you can’t foresee everything. So, my calculations are missing whatever those unexpected costs might be. 

For a traditional condo, there may be a few of these unforeseeable costs as well, but overall I’d expect them to be less with the one big caveat of the potential for a special assessment. That’s why doing your due diligence when buying a condo is absolutely critical – maybe we’ll talk about that in-depth another time.

Not done with Tiny just yet…

Despite all of the considerations above, we always need to keep in mind that humans are not perfectly rational beings. When we’ve got our hearts set on something, sometimes there is no amount of information that can change our minds. We do not make decisions based solely on cold calculations.

However, if you were thinking that moving into a tiny home could be the solution to a tight financial situation – I’m afraid to conclude that a tiny home likely won’t be the answer.

The post The Tiny Home Wasn’t for Me, For Now appeared first on Mixed Up Money.

If you’ve been considering moving into a tiny home but you are not sure where to start, you’ve come to the right place! 

I have long had a personal interest — okay, borderline obsession — with tiny houses since I first saw one in 2015 on a Netflix documentary called “Minimalism: A Documentary About the Important Things.” Since then, I have sunk countless hours into researching regulations, scrolling Instagram pages, watching YouTube videos, tinkering with design concepts, and even planning for a tiny house of my own. 

Back in the spring of 2017, I was considering building or buying a tiny home. At the time, I faced many of the typical challenges tiny home hopefuls tend to encounter.

LOCATION: Where do I put it?

MONEY: How do I get financing?

CONFUSION: How do the regulations work? Who can build me one?

In the end, I decided to go and do some extended travelling and see more of the world while I was still in my late 20’s.

Now, four years later, I have decided to take a much deeper, more intentional dive into the possibility of buying a tiny home for myself. 

Thankfully, this time around, the answers have been easier to find! It is also is very encouraging to see how far this movement has come. So now, I am excited to share with you some of the knowledge I have gathered during my last few months of tiny house research.

Let’s review some of the real-life consideration factors influencing my decision, and hopefully, some of these takeaways can help you with your decision. Let’s start with the basics.

What is a tiny home?

There is no universal definition for a tiny home. However, when skimming the first page or two of Google, you’ll see that “tiny” is roughly classified as a structure around 400 square feet or less. 

Tiny homes can also come in many shapes and sizes. Whether it be a school bus conversion, a van make-over, a retrofitted shipping container or just a mini-sized traditional structure – people have been finding ways to make small spaces livable in creative ways for years. 

One version of the tiny home that has risen in popularity above the rest is the Tiny House on Wheels (THOW). In this post, we will look closely at these THOW’s as they are both the most popular and the most applicable to my journey. If I ultimately decide to build a tiny home, it will very likely be one on wheels! 

An important note for THOW’s is that the overall size of the home is limited because it is built on a trailer as its foundation. This allows the unit to be moved by any truck or SUV with a hitch and a strong towing capacity. Check out this article for more information on towing capacity requirements and total weight restrictions.

To be compliant with transportation regulations and avoid the need for special permits and procedures to move house, the maximum width of a standard trailer is 10 feet. But, due to the framing and insulation of the walls, the actual livable space inside the home is only 8.5 feet wide. As for the length, the maximum roadworthy allowance is 40 feet long. 

Why is a tiny home a good choice?

#1. Affordability

For some, cost considerations are a primary factor in choosing to move into a tiny home. For those handy enough to construct the dwelling themselves or with help, the project’s overall cost can be kept as low as the price of an excellent vehicle. However, for those using an established tiny house builder, the dwelling may cost anywhere between $80-200K. 

This may not be as cheap as some may expect. But have you seen some of these things?! They are gorgeous. Take a video tour here of one of my favourites by Minimaliste Tiny Homes (pardon their French).

Depending on your approach to acquiring your tiny home and your long-term plans, you may be paying about the same as a basic condo. So why take this route? Let’s keep highlighting some of the reasons.

#2. Portability

Many tiny homes, not just THOW’s, come with the ability to drive themselves, be towed, or be relocated at a reasonable cost. In addition, having the ability to change geographic locations quickly and with minimal switching costs makes tiny living an attractive option. Whether you’re moving across town or the country, relocating your home saves you time, energy, and most likely money.

#3. Flexibility

This is a big one for me. I am not the most hardcore of the tiny-home folk who see this as a complete shift in how I want to live my life forever. Instead, I see this as an approach that makes economic sense for now and in the future. 

For now, it gets me out of the rental market. I want to be putting my monthly rent toward something that could build some equity for a while now. However, I have struggled to accrue a complete 5% down-payment, let alone a full 10-20% down you arguably should wait to save for lessening or erasing the impact of CMHC fees. 

In the future, I plan on using the property as a vacation rental property. There are a dozen of similar units within an hour of my home on Air BnB right now. Each comes with an average nightly price of $120. So aside from using it myself for years and years to come, I’ll be able to have it generating revenue if and when I save enough for a traditional home or reach a point in my life where it is time to start a family.

#4. Simplicity

Let’s face it, a dwelling that is less than one-sixth the size of an average US home is going to require its inhabitants to make some decisions. Tiny house living forces us to examine all of the “stuff” in our lives. It requires us to investigate the utility of literally everything that we allow into our home. Though challenging, the elimination of all non-essential items in our lives can be a truly liberating experience. 

#5. Lifestyle

With less space inside, we’re encouraged to spend more time outside of the walls we call home. Whether it be spending more time in nature, playing sports, or simply lounging on an outdoor patio, those who choose to downsize their home often choose to upsize their time spent outdoors. 

#6. Environmental Impact

As a society, most agree that now is a very important time to think about what is best for the planet. Reducing your overall footprint is a great place to start, and tiny house living is aligned with that purpose. Tiny houses are often equipped with entirely off-grid living capabilities, and even those hooked up to the grid consume a fraction of the energy required by traditional-sized homes.

What are the challenges and drawbacks of living in a tiny home?

#1. Limitations

 There are plenty of adjustments you’ll have to make and considerations you likely won’t have had the foresight to consider. Rather than list them, check out this video by an experienced tiny house inhabitant ranting about everything she doesn’t like about the tiny home.

#2. Location 

If you’re in the market for a tiny home, there is a good chance that you do not currently have the wealth to purchase land for a place to put it. This means you’ll likely need to pay someone’s rent to place it somewhere. Municipalities vary in terms of their acceptance of tiny homes but generally speaking, the closer you are to a major city, the more difficulties you will have. This means you’ll likely have to look outside of your city limits which means more commuting.

On top of that, you’ll have to find someone willing to rent you a space on their land. For this to be a feasible scenario, you’ll want to keep your cost to rent the land under $500. For me, I think of this cost as similar to that of a monthly condo fee. Both suck to pay, but it’s just part of the deal. 

#3. Entertaining

If you build it, they might not come. If you’re the type of person that likes to host your friends for dinner and entertainment, you may not have the types of get-togethers you are used to. The small spaces aren’t for everyone, and realistically, you’ll only be able to host a few people at a time comfortably. You’re likely to be a bit of a drive for your friends and family to come and see you as well!

How do I obtain financing? 

Over the last few years, as home builders specializing in tiny houses have established themselves, they’ve also established relationships with the banks. The longer the builder has been completing quality built homes, the more likely they are to offer a direct line to an agency that can provide you with financing. 

From a regulatory standpoint, a THOW is treated the same as a recreational vehicle (RV). As a result, the banks also treat these movable dwellings as an RV. This means the financing you’re likely to obtain as a tiny home buyer is similar terms to that of an RV loan than they are a mortgage. This means your maximum amortization term will be 20 years which is a little less than the typical 25-30 year mortgage term. 

Another significant difference is in interest rates. In 2021, interest rates are very low, which allows homebuyers to access rates below 2% on a traditional mortgage. Unfortunately, for tiny home hopefuls, these rates are next to impossible to come by because of the RV designation. 

As with any loan, the desirability of the terms will depend on your income history, credit score and liquidity available for a down payment. 

As someone who is embarking on the journey toward tiny home ownership, I can tell you that for a person with an income of around $80,000 and a credit score of about 800, the interest rate I was quoted on a $150,000 tiny home construction with the minimum amount down ($5000) was 5.5%. This was the ballpark figure I was given in August 2021 by the go-to lender for Tea Cup Tiny Homes. Speaking of which, if you are interested in more on this topic, check out Tea Cup Tiny homes on Instagram or YouTube, as they have a ton of helpful informational content.

Either way, the information about tiny homes is much bigger than the space owners will have. But, all that says is that many people are interested in becoming tiny homeowners, just like me. 

What are your thoughts on tiny homes? Would you ever move into one or purchase one for yourself? Let me know in the comments! 

The post Should You Buy a Tiny Home? appeared first on Mixed Up Money.

If you think homeownership is in your future, it’s never too early to start saving for your down payment. However, even if homeownership isn’t in your near future, establishing good savings habits and creating tangible goals is still incredibly important and can help you stay on track. This is especially true in Canada right now (or any hot real estate market that is), where homeownership has become incredibly expensive and incredibly daunting.

First, I want to preface by saying that I feel that we are a bit house crazy as Canadians. We see homeownership as a significant financial milestone and sometimes buy-in before we’re ready. Although there are many positive reasons to buy a home, make sure you’re also looking at the negatives and potential consequences. You should be in an excellent financial situation and are sure you’re buying for the right reasons before you start the process of saving for a down payment.

I have yet to begin my first-time buying process, but I think the time will come in the next five or so years. With market prices constantly changing and new policies being put in place, I need to know my options now to plan accordingly. If that’s you, hopefully, these tips can help eliminate some worry and give you some insight into ways you can subsidize the down payment that you didn’t know existed.

How much is the minimum down payment?

First, let me start by explaining that a down payment is the portion of a home’s purchase price paid by you, the buyer, while the rest is paid through a mortgage, otherwise known as a secured loan. If you choose to take out a mortgage (nearly everyone does), you will then have to make periodic monthly payments, including interest, to your mortgage lender.

The minimum down payment requirement in Canada will depend on the home’s purchase price and will typically be between 5-20%. The higher the purchase price of the house, the higher the down payment must be.

• If the home costs $500,000 or less, your minimum is 5% of the purchase price.

• If the home costs between $500,000 to $999,999, you must put down 5% on the first $500,000 of the purchase price and 10% for the portion of the purchase price above $500,000.

• For homes that cost $1 million or more, you are required to put 20% down on the purchase price.

How much of a down payment is the right amount?

The amount you put down will be different for every homeowner and based on various factors – finances, risk tolerance, preferences, etc. There are a few things to consider when deciding on a down payment. One thing is the cost of Canada Mortgage and House Corporation (CMHC) insurance. When you put less than 20% down on a home, your CMHC insurance is a requirement. This protects your mortgage lender from repayment risk, and you can choose to add the insurance cost to your monthly mortgage payments. If you can pay 20% or more, it may be worth considering to avoid this additional fee. But, a 20% down payment isn’t always the best choice.

Another thing to consider is the opportunity cost of putting more money into your home and taking money out of other assets — like investments. Some finance experts will recommend putting down as little as possible so that you can instead invest that money in the stock market and earn more than the interest rate on your mortgage.

With interest rates so low right now, it’s something to consider and is worth discussing with a professional. The most crucial step is to determine how much of a mortgage you can afford, which will heavily factor in the size of a down payment you need as a buyer.

Should I be saving for a down payment while in debt?

Before I point out saving strategies, I feel like this is an important thing to note. While I don’t think you need to be completely debt-free, I do believe that it’s vital that you’ve paid off any high-interest debt before starting to save for a down payment. High-interest debt is most common in revolving debts where you pay as high as 20% (or more) while repaying down that loan. The longer you wait to pay it off, the more interest will accumulate at a dramatic rate. So prioritize paying this off first. 

Other forms of debt, such as student loans, carry a much lower interest rate at 2–6%. So, although you should still be prioritizing making payments, you may feel it more necessary to save for something like a down payment or invest in the stock market simultaneously.

How to fund your down payment:

To fund your down payment, here is a list of personal actions you can take in your financial life, along with government policies designed to help home buyers.

1. Create a savings plan

With any savings goal, you must create a viable savings plan. Have yourself a wine-fueled money date and figure out what you can sustainably put towards your down payment savings goal each month.

It’s always a great idea to automate your finances as much as possible and pay yourself first through a pre-authorized monthly contribution. This will automatically send money to your savings account, so you don’t risk spending it elsewhere. If you can’t or decide not to automate, you can also remind yourself to send the money near payday.

In terms of where to keep your money, I would recommend opening up a designated high-interest savings account. It won’t earn you much (1-2%), but that interest is risk-free. For goals under five years, it’s recommended that you avoid investing in the stock market since you don’t have time on your side to ride out any waves of market volatility.

To help boost your savings and reduce your non-essential spending, be sure to check out our previous articles titled: How to Cut Back on Non-Essential Spending and How to Control Impulse Spending and Save Your Money.

2. Increase your income

The other way to boost your savings is to increase your income. But, as someone who is a huge advocate of getting the rest you need and avoiding the damaging effects of hustle culture, I never want anyone to feel obligated to get a second job (which is what a side hustle is). You should never feel less than for setting boundaries for yourself. You know your limits best and whether your plate is currently full.

If you do feel like there may be room during your week for a few hours of additional work, there are so many ways to make extra money doing something you enjoy from the comfort of your own home. Be sure to check out this list of 48 ways to side hustle in Canada. I recently saw on Instagram that a woman made $50 a month from taste testing? Where can I sign up?

In addition, consider asking for a raise at your current company if it’s been a while. Build up a list of actionable steps that you’ve taken recently and the positive effect they’ve had on the company. Although it may be difficult given the year we’ve had, the worse they can say is no, and it will leave you feeling more prepared for your next negotiation.

Watch: How to negotiate your salary

3. Borrow from your RRSP using the Home Buyer’s Plan or from your TFSA

If you didn’t know, you could use the money in your investment accounts to help buy a home – whether that account is your RRSP, TFSA, or a brokerage account.

To borrow from your RRSP, you will need to qualify for the Home Buyer’s Plan (HBP) to take money out without incurring a tax consequence. To be eligible, you must be a Canadian purchasing a home for the first time in four years and are limited to $35,000 per person. Think of it as an interest-free loan you need to return to the account within a maximum of 15 years, or they will tax the money as regular income. For more details, check out my previous article detailing the Home Buyer’s Plan here.

If you wish to take money out of your TFSA, your options are more flexible than the RRSP. You can take out as much money as you want, and the following year the government reinstates your contribution room.

While using money in your investment accounts is a great way to help save for a down payment, make sure you’re considering the opportunity cost of not keeping that money compounding in the stock market. It’s never a good idea to put your retirement in jeopardy, so consider leaving a portion of your money in your accounts or checking to see if you have a pension plan with work beforehand.

4. Apply for the First-Time Home Buyer Incentive 

The First-Time Home Buyer’s Incentive is a government program to help Canadians purchase their first home. It essentially allows Canadians to take out an interest-free loan or mortgage from the government between 5-10% of the purchase price, depending on when the home was built.

The exciting thing about this loan is that it is a shared equity mortgage – meaning that the 5-10% repayment will depend on the future market value of the home, not the original purchase price. For example, if the house goes up in value, the repayment percentage will equal a more excellent dollar value, and if the home goes down, the value will be less. This helps protect you against any downside risk but can eat into some upside potential until you pay the mortgage off. There are essential criteria that you need to fit to qualify for the program. 

Be sure to check out this Eligibility and Savings Calculator to see if the First-Time Home Buyer Incentive may be right for you.

As a young Canadian, I’m right there with you…

As a young Canadian living in one of the hottest markets in the country, I understand if you’re feeling demotivated and helpless at your future homeownership prospects. I supported my boyfriend for nearly a year as he tried to buy his first home and got outbid by over a hundred thousand dollars in bully offers without as little as a home inspection.

It’s a crazy market we’re living in, but I think what’s most important is making sure you don’t stretch beyond your means, take breaks from searching if you’re feeling emotionally drained, and talk about your frustration with others going through the same thing.

Hopefully, these tips help you feel more confident in your options and more in control of your homeownership goals.

The post How to Save a Down Payment appeared first on Mixed Up Money.

In the news, you probably see headline after headline boasting about the insane real estate market that is hitting many major cities across Canada. From one home going for $250,000 over list price in Ottawa to another going for $700,000 over list price in Toronto — it might seem like a scary time to attempt to buy your first home.

Many Canadian homebuyers ask themselves when the best time to buy a home is over and over again. The problem with this question? It’s the wrong one. Trying to time the market, whether it’s the stock market or the real estate market, will never end well for investors. 

For that reason, here are some excellent determinants of whether or not it’s a good time to buy a home, no matter where you live.

How to determine if it’s a good time to buy

When it comes to buying your first home, the best time to buy is once you can confidently say you are financially prepared. But, there are always other factors that may feed into your decision to purchase.

Consider the current real estate cycle

One thing about real estate is that although we cannot assume what’s to come or predict housing costs, historical data can tell the only story we need. Like the stock market, even the most experienced professionals do not know when it’s the best time to buy. 

The only time anyone can know if it’s the best time to buy a home is when the prices start to rise again the following day. So, instead of gambling, the best thing to do is look at the historical real estate cycle. 

According to the Canadian Real Estate Association (CREA) data, each year, home sales spike starting in April and continue to sell faster until the end of August. Most sales typically occur in May. Therefore, spring and summer could be a more competitive time to buy. 

We can assume that over this period, you’d be buying in a seller’s market. A seller’s market means that it’s advantageous for sellers given the number of buyers versus the available inventory on the market. With fewer homes for sale, you can see many more bidding wars and homes selling over the list price.

The lowest month for sales is typically December, meaning it’s more of a buyer’s market. Fewer sales mean it is less competitive, and you may have a little bit more wiggle room to negotiate. This makes sense, given there aren’t many Canadian cities that would be a ton of fun to move in when it’s cold outside. Not to mention, it’s hard to view the landscape of a home while covered in snow.

Your financial situation is rock solid

Now that we can all agree, it’s impossible to predict the best time to buy. Instead, let’s remember that it’s essential to look at historical real estate data for a clearer picture. From there, the next deciding factor should always be your financial situation.

Before you buy, you’ll need to ensure a few financial tasks are taken care of, including:

• Have a legitimate down payment (plus closing costs)

• Save an emergency fund for any unexpected home expenses

• Have a debt-to-income ratio of less than 36%

• Have a solid credit score in the 600-700 range

• Be able to provide all of these financial documents to your lenders

Although you don’t have to be perfect with your money to buy a home — and none of us are — it’s never a bad idea to be more prepared than the average homebuyer. 

Here are three things we did with our finances before we bought our first home (that have all come in handy since the start of the pandemic):

1. Ran all of the numbers to ensure we could afford the mortgage and all housing expenses on one income in case of job loss or emergency 

2. Saved an emergency fund that is specific to our needs as homeowners, and that would cover the cost of our most expensive appliance

3. Made a printable checklist of all the home maintenance we should do each year and can check off as we go — because trust me, it’s a lot.

Factors to consider (but not be your driving force behind a decision to buy)

Aside from the cyclical side of real estate and your need to be in control of your finances, I’m sure you’re curious about some other common factors that people mention are leading their decision to buy.

Mortgage rates

A common theme during the pandemic has lead people to feel now is the best time to buy, given the Bank of Canada interest rates. Currently, the interest rate sits at 0.25%, and that is the lowest it can go. 

As of now, the bank has confirmed they will hold still until at least 2023 when they predict the economy will be back at an inflation rate of 2% – or what they consider the comfort zone). In 2020, our inflation rate sat at 0.62%, with the previous low being 0.3% in 2009, one year after the 2008 recession. 

Although low-interest rates are appealing, they also vastly affect the housing market. One thing to remember if you secure a low-interest rate is that your mortgage may not stay at that price forever. You need to be sure you can afford the same home price if, and when, interest rates jump up. Here’s an example of what a change in mortgage rate could cost you (taken from Financial Post and MoneyWise):

“The buyer of a typical $530,000 Canadian home who made a 10 percent down payment could have recently bagged a five-year fixed-rate mortgage at a low 1.39 percent. Amortized over 25 years, the loan would have cost the borrower $1,941 per month.

But today, that buyer might land a loan 15 basis points higher: 1.54 percent instead of 1.39 percent. The mortgage payment would be $1,975 — an increase of $34 a month, or $408 a year.”

Again, the bottom line is doing the math and making sure the numbers line up no matter what you decide to do.

Outside pressure

Typically, nothing is cut and dry when it comes to your financial life and your decisions because we are all in such unique positions. The one exception is when you are about to make a six-figure decision based on outside influence or pressure from friends and loved ones. This is never a good reason to purchase something.

Common reasons that I hear people wanting to buy homes include:

• Feeling left behind

• The fear of missing out (FOMO)

• Wanting to get into the housing market before prices go even higher

Making things work or finding a way to scrape by when it comes to your financial future isn’t an excellent idea for a few reasons. For one, you could end up spending more money than you anticipate or put yourself in a difficult spot financially, forcing you to change any great habits you’ve built. 

Renting is not a bad thing, and this is especially important to remember if you are constantly being told that it’s throwing money away. It’s a common misconception that buying a home is a good investment. But, you can learn more about why this may not be the case by reading When Should You Invest in Real Estate vs. The Stock Market?

Ultimately, the considerations that can lead us to decide whether now is the best time to buy a home should come from your financial situation rather than what the real estate news says. Paying attention to cycles and the market is essential. Still, so is looking at your lifestyle and confirming whether now makes sense to buy and take on the financial obligation of becoming a homeowner. 

The post When is the Best Time to Buy a Home? appeared first on Mixed Up Money.

Owning a home is a financial goal for many Canadians, but it can be hard to save up enough money given homes’ current prices. But, using things like the first-time Home Buyer’s Plan (HBP) and your Registered Retirement Savings Plan (RRSP) can effectively help you reach that savings goal sooner.

What are your options when saving for a home?

At this stage in my life, homeownership is an expected milestone among my peers. I’ve even seen several social media friends posing with a sold sign in front of their new digs. I’m not in the market personally, but my boyfriend is, so I know first-hand the stress and anxiety you may be feeling about finding the perfect home at the right price. If this is you and homeownership is something you’re exploring, I feel it’s important to know your financial options. 

The most obvious thing you should do when you’re starting to save for a home is to calculate how much you’ll need for a down payment. If you plan to buy in the next three to five years, a high-interest savings account is a safe place to store your savings. Next, you’ll need to calculate how much of a home you can afford. There are some great online mortgage calculators to help with this, such as RateHub or LowestRates. From there, it’s time to consider closing costs and the additional increase in expenses you may face as a first-time homebuyer.

If you’re not sure you can save up enough by the time you want to buy, another option is the first-time Home Buyer’s Plan. You may have heard of an RRSP when it comes to saving for retirement, but have you heard of the RRSP Home Buyer’s Plan? Today we will discuss how your RRSP can be a feature to help young Canadians with the rising costs of homeownership. First, let’s talk about the RRSP.

What is a Registered Retirement Savings Plan (RRSP)?

The Registered Retirement Savings Plan (RRSP) was created for Canadians in the 1950s. Since then, it continues to incentivize saving now for later through how it treats taxes. When you do your taxes, the government will require you to share how much you contributed to your RRSP that year. You may have been pleasantly surprised to see any RRSP contributions are then deducted from your taxable income. In other words, in the government’s eyes, you made less money that year and didn’t have to pay as much tax. 

The money in your RRSP then grows up until you retire, to a maximum of age 71, when you need to withdraw the savings. This can either be in a lump-sum or converted into a different account called a Registered Retirement Income Fund (RRIF), where you begin taking scheduled withdrawal payments. The money is taxed when you take it out; however, the point is that most people are in a lower tax bracket at retirement and are better off for it. 

Now that we know our RRSP basics, how can this account help you pay for your first home? Let’s learn about the HBP.

What is the Home Buyer’s Plan (HBP)?

In 1992, the Home Buyer’s Plan (HBP) was temporarily born and later turned into a permanent program given the Canadian real estate market prices. The HBP allows RRSP contributors to withdraw money from their accounts to help them with buying a home. 

Like I mentioned previously, RRSP contributions are tax-deductible; however, you pay tax when you withdraw the funds. What makes the HBP unique is that eligible withdrawals are tax-free. Although you have to pay the money back eventually, you’re essentially taking out a tax-free, interest-free loan.

This may sound pretty cool, but let’s go into the details a bit more. 

To be eligible to use the HBP, you have to be a Canadian purchasing property in Canada, and you can’t have owned a home in the last four years. This doesn’t necessarily have to be your first property purchase, as you can be eligible to use the HBP more than once in your lifetime. 

The funds you can take out are not unlimited and are capped at $35,000 per person. If you’re buying a property with your partner, then they too can withdraw $35,000, up to a combined total of $70,000. If you withdraw too much, the excess amount will be treated as a regular RRSP withdrawal. 

Buying a home is a stressful time, and you’ll want to secure your finances before finalizing any deals. That’s why you’re able to withdraw the money beforehand, as long as you buy or build a home by October 1st of the following year. 

It’s better to withdraw in advance, as you only have 30 days after the closing date to claim your eligible withdrawals. “Homes” can include detached and semi-detached houses, duplexes and triplexes, condos, and apartments. 

If you are interested in the HBP, eligible RRSP contributions had to have been made three months beforehand, meaning that there has to be a little planning involved. All money withdrawn from your RRSP for the HBP has to be returned within a minimum of 15 years. In this case, you can consider this down payment a loan from your future self. 

Although it’s good to understand all of the options available to you in your homeownership journey, the Home Buyer’s Plan may not be for everyone. Understanding the pros and cons and how they may affect your unique situation is essential before making a financial decision. 

Is the Home Buyer’s Plan (HBP) right for you?

Although it sounds great on paper, the HBP isn’t a good idea for everyone. Let’s run through a few situations where you may be considering the HBP to help with a down payment.

Scenario 1: By using the HBP, I would be withdrawing all of the money from my RRSP

If, after using the HBP, you have nothing saved for retirement, you’re putting your future self in a risky position. Do you have a pension plan set up with your employer? How much is in the plan? With an employer-sponsored pension plan, you at least have another untapped outlet for retirement savings. Any time with money not in the stock market means you miss out on years of earning potential. 

Do you have money saved in a TFSA? Or, are you using all of your available funds to buy a home? If the latter is true, I would suggest holding off entirely until you’re in a better financial position. Remember, the earlier you start saving for retirement, the better. Your home may appreciate, but that equity isn’t available to you unless you sell. This is what the term “house poor” refers to, and so many Canadians today are in this exact position. Make sure that you’re not sacrificing your future retirement goals by only focusing on today.  

Scenario 2: By using the HBP, I would still have money saved for retirement

Say you have additional money saved in your RRSP or your TFSA, or you have an employer-sponsored pension plan. With that extra retirement cushion in place, we can start talking seriously about whether the HBP is a good fit for you. 

The main benefit to using the HBP is avoiding paying for Canada Mortgage and Housing Corporation (CMHC) insurance. CMHC insurance protects lenders in the case that you don’t make your mortgage payments. You must get CMHC insurance if you buy a home with a down payment of less than 20%. CMHC insurance will be an added cost to your monthly mortgage payments. If you’re able to put down enough to make that 20% cut-off using the HBP, that’s a great reason to use it. 

If, however, you already have enough, there may be different benefits or drawbacks to you. On the one hand, you’re reducing the interest you’ll pay on your mortgage, but on the other, you’ll lose out on the interest you could’ve gained had you left the money in investments within your RRSP. 

With mortgage rates being so low right now, this is worth considering. 

Choosing whether you use the HBP is a decision every future homeowner should make on their own or with a professional. It’s certainly not “free money,” as you have to pay it back eventually, but it can help with homeownership’s rising costs and to avoid additional costs from insurance. 

It’s important to know that fixed assets or property can’t and shouldn’t be used to replace your liquid assets or investments. If you choose to use the HBP, make sure you’re prioritizing your RRSP repayment plan and saving effectively for retirement.  

The post What is the Home Buyer’s Plan (HBP) and What Are The Benefits? appeared first on Mixed Up Money.

Owning a home is a significant responsibility. Not only do you have to maintain good financial standing and pay all of your monthly bills, but you also have to take care of your six-figure asset by continually fixing and working on the property. After all, it’s not going to increase in value if it’s not maintained over the years. But, one significant way to protect your home (and financial life) is by having a solid household emergency kit and plan.

You probably remember putting together a fire escape plan in middle school and your teacher asking whether your family had anything in place if this emergency would happen. We did not, but I found it very calming to know that if anything happened at our home, I’d have a piece of paper reminding me of everything I should do at that moment. 

Being overprepared is something I’ve always been good at. So, as soon as I became a homeowner, it only made sense to continue down the path I knew very well. 

The first thing we did before we closed on our home was making sure we had a full household emergency fund. It was (and should be to you, too) very important to us that we never felt house poor and that we would be able to afford any unexpected expenses that came our way. 

Once we moved in, the next logical step was to build an emergency kit that could protect us from every emergency. I, like many people, put this off for a few months. Until 2020 hit (like a bag of bricks), and the paranoia became something of a reality. 

What is in my household emergency kit?

Everyone (renters included) should have an emergency kit or grab bag that they can quickly access if they need to quickly evacuate their home. Depending on your personal needs, the emergency kit may have different medicines or toiletries. But, each emergency kit should, at minimum, include: 

• A first-aid kit

• Your household emergency plan

• A flashlight or matches and a candle

• Water for each family member (typically that can last you up to 72-hours)

• A small amount of cash

• A blanket

• Small tools

• Spare clothing

• Non-perishable food items

• Personal protective equipment (masks, gloves, eye protection, etc.)

After doing a lot of research and spending a lot of time diving into every potential emergency disaster that we could face (including a couple of fun ones, like a zombie apocalypse) – I learned what we might need in an emergency kit. Our kit includes everything from the essentials list, plus a few additional personal items. 

What other items do we have in our home to protect us from emergencies?

Aside from a backpack that we keep near the front door in our home, we also purchased a few other must-have items to protect ourselves from unexpected disasters. Although you may need to leave in a hurry, some household emergencies might need some additional attention or that may provide additional evacuation time, such as a flood.

As household fires are the most common disaster homeowners face, we bought essential items: a fire extinguisher, fire ladder, and fire blanket. We also wanted to keep all of our special documents safe, such as our estate plans and property information, so we chose to purchase a fire-safe lock box to store in a secure location.

It can be challenging to keep the items you might need in case of evacuation on hand at all times. Instead, we have a laminated checklist that we store in our front closet that is easy enough to run through anytime this situation occurs. This checklist exists because anytime we are under stress, it is only human to panic and forget everything you may need to do in an emergency. 

We want to encourage others to keep the same list as us on hand in their homes so that no one ever feels unprepared during a crisis. You can download our emergency preparedness guide for free.

Ultimately, every family is different and lives in another city, impacting what you feel you need in your home and what types of emergencies could affect your livelihood or home.

What kind of emergencies should you prepare for as a homeowner?

Emergencies can come in many forms. From financial troubles to natural disasters, you should always have a plan in place to protect yourself and your family. 

For Canadians, the most common natural emergencies are as follows:

• Household or forest fire

• Flooding

• Earthquakes

• Extreme cold temperatures and snowstorms

• Tornados

• Earthquakes

• Landslides

To confirm which natural disaster you’ll likely experience depending on where you live, you can check Public Safety Canada.

As far as household-specific emergencies, these are the most common: 

• Cooking related fires

• Heating equipment fires

• Electrical appliances setting on fire

• Smoking or lighting candles in the home

The Canadian Red Cross has a great infographic to protect you and your family from these disasters and provides you with the best steps to take during these situations.

What can you do to protect yourself aside from having an emergency kit?

Now that you have all of the information you need to build an emergency kit for your family, the next natural step is to ensure you’re covered for all of these emergencies through home insurance. The first thing you may learn is that not every potential crisis is covered. Although most insurance will cover water damage at a minimum, from, say, a burst pipe, they may not be able to cover the damage caused to your home from a major flood. 

If you do not yet have home insurance, do your due diligence to research and ask your insurance broker what they do in the case of a house fire, flood, or natural disaster. If you already have insurance, make sure you follow up to confirm you have enough coverage during any renewal period. 

Emergencies might feel difficult to prepare for, considering you cannot predict the unexpected. But, that doesn’t mean you shouldn’t take the potential of one impacting you and your home seriously. Preparing by having the right precautionary plan and tools and the right insurance coverage is just as crucial as preparing financially. Both situations will impact your money in the end. 

The post What’s in My Household Emergency Kit? appeared first on Mixed Up Money.

Moving away from home for the first time can bring forth a variety of emotions. Whether you are leaving for school, work, or to get away from your helicopter parents, this is a huge milestone and may include excitement, nervousness and a little confusion. 

I moved away from home for the first time at seventeen and have since seen it all. I’ve lived on my own in a foreign country, lived at school with four other female roommates, lived with a significant other, and have moved back home for periods in between. With each new living arrangement, I’ve learned a lot about myself and will cherish those memories for years to come, even if they may not have been pleasant at the time. 

Picture a mixed dorm in a small French city where you had to take seven flights of stairs and your alarm clock being 6:00 a.m. closing time at the Irish pub underneath. If anything, the memories make for good stories and a few laughs now. 

If you are moving away from home soon, you may feel a little overwhelmed with the process, and that’s normal. This is likely the first time you will be taking a significant role in your finances. Many people document the fun side of moving, like buying furniture and grocery shopping but fail to report the other side, like arranging hydro and budgeting expenses. 

Regardless of your experience, let’s look at ways to help steer you in the right direction and make this exciting transition in your life a smoother one. 

You need to have a budget when you move out 

Before you make a move into your new crib, or even before you sign a lease, there are a few essential steps you should take. The first being a thorough budget overhaul. You won’t be leaving for long unless you can afford it. Make a realistic budget of your expected inflows (income) vs. outflows (expenses) and see how things add up.

Most people typically spend between 35% to 50% of income on housing and utilities. A crazy number that makes living at mom and dads seem a little nicer, I’m sure. In addition to rental or mortgage payments, this includes the cost to heat your home, electricity, telephone and cable service, and water. It would help if you considered other monthly expenses, including groceries, transportation costs such as parking or public transit, and entertainment costs such as alcohol or eating out. According to Credit Canada’s Budget Planner, your monthly expenses will look like this as a percentage:

1. Housing & Utilities: 45% 

2. Food: 15%

3. Transportation: 15%

4. Debt Payments: 5%

5. Savings: 5%

6. Personal & Discretionary: 5%

7. Clothing: 2.5%

8. Medical: 2.5%

These numbers don’t consider an individual’s unique needs and should be tailored to your situation. When analyzing your budget, always ensure that 5% or more of your income is put aside into savings for the future or a rainy day. If you’ve budgeted out your spending and don’t have 5% leftover for savings, something needs to be changed. A budget is excellent; however, unanticipated expenses often arise, and you don’t want to be worried every month that you won’t be able to cover the unexpected and the unavoidable. 

Focus on managing your income streams

Analyzing your budget will surely lead you to some realizations. Either your finances are in good shape for move-out day, or you need to make some changes. Maybe you already knew that you would require additional funds; however, the budgeting piece will give you a clearer idea of what those additional funds should be. 

The level of financial independence you have will look different to each person when moving out for the first time. Family members may partially or fully fund you, you may already be in the workforce with a full-time job, or receive funding through student loans or a part-time job. Everyone is at different stages in life, and none are superior. The key is to manage your income streams and make sure they work for you. 

When I first left home at seventeen, I had no income of my own and was being fully funded by my parents. Although I was very fortunate to have their support and have open conversations with them surrounding money, I realize that this may not always be the case. Money can create tensions and misunderstandings between family members if essential discussions aren’t taking place. I have friends who still feel pressure from family members over money, even though there is a surplus of funds. Gifting money creates an agreement between two parties, and without a breakdown of the necessary details, it’s easy for one side to feel slighted. 

If you are receiving funding from family members, I recommend sitting down before move-out day to discuss how that will look. They may only want to fund certain expenses such as phone or cable bills, or they may wish to provide you with a monthly allowance used at your discretion. They may have no boundaries; however, having the conversation will keep you both on the same page and avoid future issues.  

If you aren’t receiving enough income through work, family members, or student loans, you will have to consider other income streams before moving out. This could include picking up additional hours or taking on a part-time job. Getting that in place before leaving will significantly reduce an already stressful moving experience. 

An emergency fund is essential

For anyone taking more control of their finances, one of the first steps is to set up an emergency fund. Depending on your unique situation, an emergency fund should make up between 3 – 6 months of your expenses. Things happen, unexpected expenses come up, and income streams may be interrupted (insert *2020*). You don’t want a situation where you are unable to pay rent due to these circumstances. 

Before moving out, it may be unrealistic to save your entire emergency fund; however, you should have a few months’ worths and continuously add to it. For more details on emergency funds and where to keep them, see this recent article on the blog: Emergency Funds: Why, What Type, and How Much?

Don’t forget about tenant’s insurance when you move out

Although tenant’s insurance is not required in all parts of Canada, I highly suggest acquiring a plan before renting. They are relatively affordable and protect you from various home-related issues. Each plan is unique; however, most policies cover your belongings, accidents in your home, and unanticipated living expenses. 

Coverage for your belongings covers anything in your home that is lost in an unfortunate event. Coverage for accidents, or liability insurance, protects you if someone gets hurt on your property and wishes to sue. Unanticipated living expenses cover the cost of relocating temporarily should your unit be uninhabitable for some time. 

To get a quick estimate, check out Sonnet Insurance’s quote generator. I inputted my information, such as address and types of residence, and was able to get a quote in five minutes for $28.62/month. Most often, tenant’s insurance is even less. To compare quotes from different insurance providers, search for home insurance in your area online.

Another insurance consideration when leaving home is making sure your current coverage remains the same. If you are receiving coverage under your parents, for example, healthcare coverage, you should reach out to the company and ensure that this won’t result in any interruptions. They will likely want to have your updated address information as well. 

Remember to set up your necessary services

When you first move-out, you may be surprised that some services, like water, aren’t automatic and need to be set up. I know that I was. Before you move-in, make sure that your utilities such as heat, hydro, water, and cable are set up. 

Choosing an energy provider in Canada may be different for every region. Some provinces, such as Alberta, have more options because their market offers many deregulated providers. Deregulated providers operate in the market like any business, competing with each other based on service and price. Markets that only offer regulated providers have much fewer options as governing bodies set prices. To check out the various providers in your area, check out energyrates.ca. 

I didn’t know before moving out that energy costs vary based on the time of use. If you are interested in reducing your energy bill, consider running appliances later in the evening when rates are lower. I went several years waiting until 7:00 p.m. to use the dishwasher, and sometimes still do. 

Have ‘The Talk’ with your roommates

When you leave home for the first time, you may be moving in with a significant other or roommate(s). Often, most of us do. Roommates make the financial load a lot easier and provide emotional support. If you are moving in with others, you should have a conversation about shared expenses. 

Each living situation is different. I’ve had instances where I’ve shared everything with my roommates, such as groceries and minor expenses, I’ve shared some things like splitting the cost of furniture, and I’ve also kept things completely separate. Before you move in, you should have a conversation about what you want and what is expected of everyone.

If nothing else, you will have to share the services mentioned above and develop a payment plan. Likely, one person will front the bill, and others will pay them back. You may decide to divide the bills at the end of each month, or you may choose to combine your money in a pool before-hand, to be drawn down during your time together. As long as all members are ok with the arrangement and are holding up their end of the bargain, you’re golden. 

Leaving home for the first time is a huge milestone and should be filled with excitement, maybe a few tears from mom and dad, but not an unnecessary amount of stress. As an extensive future planner myself, I understand that you may feel nervous about the unknowns. If topics like tenant insurance and hydro providers are confusing to you, that’s completely normal. By simply reading this article and taking notes, you’re in a far better place than I was at seventeen. All will be figured out, and soon, the only thing you’ll be missing is home-cooked meals. 

The post A Complete Financial Guide to Moving Out for the First Time appeared first on Mixed Up Money.

Finally! It’s that time of year when we can spend the majority of our days outside and embrace the sunshine (without harming our precious skin — of course) and embrace our opportunity to grow new life. I’m talking about plants, obviously! 

As a new homeowner, I’ve looked forward to having my own garden and growing herbs and vegetables. When I was renting, for some reason, the idea of taking on this responsibility seemed like a poor use of time. Why would I landscape in a place that I won’t be able to continue to maintain for years to come? Of course, if you’re a renter, you can plant and garden. But personally, it wasn’t on my to-do list until now.

I’ll be honest with you in the fact that I’m a complete rookie. Other than helping my mom water and plant flowers as a ‘non-interested’ teenager and doing minor landscaping and planting for a summer job one year, I have no knowledge about what plants work best, how much it might cost and how to start. 

So, this guide is for beginners. Plant babies, if you will. Hello, plant babies.  

Here are all of the steps I took to put together my first garden.

Step 1 – Consider two essentials: your budget and time

Before I began my hunt for building out a garden, my partner and I discussed the amount of work we were willing to take on. Typically, we don’t have much free time to deadhead and water, but these days, we’re always home. So, that meant that we would be willing to take on more responsibility in a garden than usual. 

In the past, the most I’ve spent on gardening was $20 in the Wal-Mart greenhouse to fill one planter with flowers. This time, we knew our budget would be a lot more significant. As a family, we have one fund that is specifically savings for home renovations. We both knew that our garden and outdoor landscaping would fall into this category, so we sat down and agreed we would budget around $300 for our plants, pots, materials and soil. We wanted to buy mostly flowers and only a couple of vegetables. 2020 will be our test year to get a feel for our garden, the sun and rain, and how successful we come to fall. 

Ultimately, we’d love to grow fruits and vegetables for the season. It’s an easy decision after doing a bit of reading. An article on the Journal of Extension says that ‘on average, home vegetable gardens produce $677 worth of fruits and vegetables, beyond the cost of $238 worth of materials and supplies.’ This year was strictly about fun colours and an excellent opportunity for our daughter to enjoy some pretty flowers.

Step 2 – Review and prep your location

Now that we had a set budget in mind, it was time to get an overview of what we were working with. In our house, we had a beautiful front garden bed that needed some serious love. The dirt would need to be worked, and we would need to pull out some rocks and old roots. Our garden is about 6 x 3 feet and gets a ton of direct sunlight. 

We also had some room on our front steps for a couple of plant pots that get some direct sunlight, but not all. Although there is room for a garden on the side of our house, it doesn’t receive much sun, and it seems like a lot of work for an area we don’t spend time in. Instead, we figured we’d find some cedar planters that we could put on our deck. 

Step 3 – Research your plants (or take a gamble)

The obvious next step would be to go online and look for planters that suit your garden, time constraints, and budget. Unfortunately, I sometimes get impatient and want to be adventurous. So, on a random Saturday, we ventured to a local greenhouse in our community, and with zero ideas of what kind of plants work best for our situation, I picked out everything we would need. 

Again, I don’t recommend my way. It was stressful and honestly, overwhelming. Greenhouses are significant, and there are so many different types of plants and flowers, you really should have a general idea of how to take care of each plant before you bring it home.

Step 4 – Buy your plants

We decided to shop locally, given the current economic climate. Rather than buy from a grocery store garden or head to Wal-Mart to buy some plants, we opted for a greenhouse in our community. For this reason, we had to spend a bit more money. 

These are the plants we bought:

• Celosia Bright Sparks

• Marigold

• Geranium

• Dahlinova Florida

• Calendula

• Red Cabbage

• Cucumber (I already killed this one)

• Mint (thriving)

• Basil (thriving)

• Plantain Lily – Hosta (thriving)

Most of the flowers we have are annuals because I wasn’t interested in a long-term plan. As this year was more for feeling things out, it seemed like a great way to quickly gain colour and functionality in our outdoor space.

Step 5 – DIY your garden space

One way we saved money building our first garden was by doing it all ourselves. We enlisted some gardening experts (my parents) and had their support trimming existing bushes and trees. From there, we dug up the garden bed and refreshed the soil using worm poop. Yup, you read that right. Otherwise known as worm castings, this superfood for plants, is also really good at bringing life back to old soil and dirt – which we desperately needed. 

Instead of spending part of our budget on decor, we opted to design our own hand-painted rocks as an edge outside of our garden. It’s been a fun and inexpensive hobby over the past few months, which has been great to attempt during the pandemic. 

Luckily, my daughter also received her prized dollar store pin-wheel for her birthday, and I received an adorable solar-powered owl for Mother’s Day. My plan with our outdoor space is to be as obnoxious as possible and working out well so far. The only piece of decor I bought was this birdhouse because I thought it would go perfectly with our tree — and it does.

Step 6 – Plant and maintain 

Possibly the most intimidating step in gardening is planting. When I did landscaping as a fresh-18-year-old, though, I learned a thing or two about the best ways to plant flowers.

Here are the steps you should take to plant your garden:

1. Find the perfect place for your plant needs. Do you require sun, shade, or partial sun?

2. Dig a spot that has good soil. It’s best to put the plant 6 inches or further into the ground.

3. You should gently tease the soil around the root before placing the plant in the hole for potted plants.

4. Next, fill the gap with soil, and lightly pack the soil in place.

5. Water your plants generously and immediately after planting them. 

6. Deadhead as necessary and water daily.

How much did I spend on my ‘affordable garden’?

In total, I went over budget and spent $325 to create and plant my first garden. Can you do it for less? My god, absolutely. I’d be hurt if you didn’t. 

To help, and so you can do a little bit of price comparison, here is a breakdown of my full spend:

Regardless of your budget, creating a home garden can be affordable if you are willing to put in the time and work. A good reminder is the fact that the time you invest will be worthwhile in beautiful flowers and delicious homegrown goodies. Although I didn’t save a ton of money like I initially planned, I had such a fun time creating a space that makes me happy and gives me something to do this summer.

Tell me about your home garden in the comments below!

The post A Step by Step Guide to Building an Affordable Home Garden appeared first on Mixed Up Money.

I am a renter, and I have family members who are landlords. I have neighbours who have lost their jobs, and family members who haven’t been paid by their tenants in months. Both sides are facing challenges, and I can empathize with whatever situation you may be in right now. I’m lucky that my financial situation hasn’t drastically changed since COVID began; however, that doesn’t mean that I’m not paying large amounts of my paycheck every month in rent. Growing up in midtown Toronto and now living in Waterloo, it felt as if anywhere I stayed would be a total bargain. With my year-long lease nearing its end, I realize that my previous sentiment has changed. If my boyfriend and I are going to continue living in our current apartment, I plan to negotiate a reduced rate with the knowledge I will be sharing.  

What is the rental market currently like?

Finding affordable housing in Canada has been a challenge for a long time. At the start of the new year in Canada’s large metropolitan areas, homes effortlessly sold 10% over asking, and the bidding wars proved competitive for buyers and advantageous for sellers. 

Vacancy rates on rentals continued to be at an unhealthy level of 1-1.5%, meaning that demand far outweighed the supply. In turn, real estate experts expected another year of a dramatic price increase. In January 2020, Rentals.ca expected prices to increase by nearly 7% in Toronto, 5% in Montreal, 4% in Ottawa and 3% in Vancouver. 

Although this represented a gloomy picture for young adults trying to afford housing, as of the second quarter of the year, these forecasts are changing. In a national report on rent prices released in May 2020, apartment and condo prices were down 3.2% and 4.6% month-over-month, compared to -0.7% and +1.6% over the same period last year. In Canada’s two biggest markets, Toronto and Vancouver, rent prices declined by 6.0% and 6.8% month-over-month. Could decreasing rent prices be the silver lining of the craziness that is COVID-19?

Are rental prices going down?

The price of goods has everything to do with the shifts in their supply and demand. If you have oversupplied a good for your existing demand, you will have to lower prices to entice new customers to enter the market. 

Currently, both sides of this equation are showing positive signs for renters across the country. A large population of renters are no longer entering the market at all – immigrants, international students, and seasonal workers across the border – all drastically reduced by the COVID-19 pandemic. Due to financial and safety concerns, many gig workers and students are leaving the market to move in with relatives, where the company and hot meals are all too enticing. 

Travel bans have entirely halted the demand for places to stay for a few days or weeks, which could lead to an increase in supply from short-term rentals entering the long-term rental market. Although this may not affect all parts of the country, in low-vacancy cities, this is another good option. Currently, Toronto has approximately 24,000 Airbnb listings online. 

How to negotiate rent with your landlord 

Legally, the Government of Canada has banned evictions, frozen rent hikes, and is pressuring landlords to be lenient with their tenants during the COVID-19 pandemic. 

Although this may be difficult if you live in a large commercial apartment building, smaller landlords want to negotiate with you. If you have been a reliable tenant up to this point, you are invaluable to your landlord. This situation is hard on them too, and they would much rather negotiate with you then risk losing you. 

Proactivity and communication are everything, whether your situation has changed due to COVID-19, or if you feel you are paying unfair rates in the current market situation. Do not take advantage of the eviction freeze by falling off the face of the earth and angering your landlord because these measures may soon end. 

Reach out to your landlord via email or phone, outlining your situation and provide a resolution that benefits both parties. 

If your situation has changed due to COVID, I would recommend being honest about it. Not all landlords are stone-cold, and most will sympathize with you (legally, they have to). Go over your finances and come up with a reasonable plan. 

Consistency is key. Your landlord will appreciate a number that they can expect every month. If you are in a dire situation, I would recommend reducing your monthly rent by two-fold – a permanent rent reduction and a reduction that you will pay back in the future. With any money agreement between two people, you should set up a written contract signed by both parties outlining the reduced rate and when the landlord can expect to get the money back. 

If your situation hasn’t changed due to COVID, this could still be an opportunity to negotiate with your landlord due to the changing market outlined previously. Renters have increased power right now, and this could be an opportunity to capitalize on it. 

Lay out the facts to your landlord without bombarding them with information. Check out the Rentals.ca May report to see how your rent compares to that in your area. Look up local ads on rent sites like Kijiji and see what similar housing is being advertised for. If there’s a significant difference, this could be used in your favour. 

For an example of how this negotiation could look, check out our draft email template:

Dear [Landlord],

I hope you are staying safe and healthy during these uncertain times. 

Option 1:  As of [date], I have been laid off from my full-time job and don’t expect to return for some time. I realize you may be facing challenges of your own, but I wanted to start a conversation about negotiating rent for the upcoming months. After analyzing my current finances, I feel that I can reasonably afford to pay $X amount – $X every month. The remaining $X amount will be accumulated and paid over an agreed-upon schedule once I’m able to return to work. 

Option 2: I have been researching the changing rental market and wanted to discuss these findings with you. Rent rates across the country are dropping, and with these changing market conditions, I feel that my current monthly rent is not representative of the area. I have found reputable sources to support this that I have attached. Based on my findings, I feel that $X would be more reasonable.

I hope that due to my reliability, we can come up with a mutually beneficial resolution and maintain a good working relationship. I’m willing to write up and sign a contract outlining the specifics of this agreement.

I look forward to hearing from you. 

Regards,

[Name]

If you are a renter reading this, I hope this has shown you that you have more power than you realize, as it has taught me. I hope you feel more secure in your understanding of the rental market and what options are available to you. I hope you feel confident in your ability to participate in a sound negotiation that includes factual evidence with your landlord. Because now, all that’s left is pressing send! 

The post How to Negotiate Rent During COVID-19 (With Template) appeared first on Mixed Up Money.

Working out is hard to do, she says, four weeks into her “new year, fitter me” resolution that no one asked to hear. But seriously – if you work out or want to work out but can’t get around to doing it, you know how difficult it can be to get started. For me, taking off 18 months didn’t exactly make the transition back into cardio and weight-lifting a breeze. Instead, I struggled to find a balance between finding the time and also accepting the fact that I had to start back at step one.

One of the most significant barriers to working out for me is the expense. Something I’ve always struggled to justify is the cost of a gym membership. I mean, yes, I know that they have all the equipment I need, and the facilities to level up your workouts. These things are a given. For me, it’s more so the fact that I have to spend time driving there, getting mentally prepared for what’s to come and then drive back home afterwards. If you’re not catching on yet, I really don’t want to leave my house. 

Not to mention, I already spend nearly $1,000 on sports teams throughout the year and feel like I can’t rationalize any additional cost. So, it was time to create a solution that was within my control. That solution? A home gym. 

We moved into our first home almost one year ago now, and the one part we weren’t fully taking advantage of was our unfinished basement. Of course, we have grand plans to one day turn this basement into our dream games room, but until then, it felt like a waste of space that we should be using. Enter the home gym. 

Can you still get a tough enough workout in at home?

A common misconception from many of my friends and family is that a home gym doesn’t provide the same level of toughness that you’ll get in a gym. And I mean, sure. You’re not entirely wrong. However, there are a lot of factors that weigh on this belief. So, let’s break it down into a list of pros vs. cons:

So, sure – there are a ton of excellent pros to a home gym, but also a ton of great cons. A vast majority of the reasoning behind why it may not work for you is due to personality type and experience. What you won’t notice is any comparison between the difficulty of the workout. You are the only one who can determine how strenuous your at-home workouts are, aside from your gym workouts. 

If you now think that you might be interested in a home gym, because, like me, you also hate to leave your house – let’s chat about how we did it and what purchases we made to accomplish our basic home gym. 

Everything we bought to create a home gym

As both my husband and I play competitive sports, coach or are actively involved in the sports community. We have, over time, built a good foundation of items we could use in our home gym. However, before we moved into our current place, we had to downsize most of our belongings for a significant cross-province move. Therefore, we had a lot less than we had thought. 

To start, we had two agility ladders, four lighter dumbbells (5s and 8s), a medicine ball (8), two yoga mats and two kettlebells (10 and 15). It wasn’t a lot, but it was a good start. From there, we sat down and started to do some basic research to get a feel for the cost of gym equipment. It was expensive. I won’t lie. However, there were some items that we could justify to buy first, and we would work on building out our inventory at a later date if we needed to. After all, as I was getting back into it, I wouldn’t need anything heavy-duty yet. Here is a list of everything we bought and its cost:

What type of at-home workouts do we do?

When I first started back into my workouts, I created a personalized workout program to get a feel for where I was at and let me tell you; it was worse than I was expecting. First and foremost, I knew that I would need to work on my cardio and fitness levels to get back into shape. So, this took little to no equipment. 

For the first month, I used five-pound dumbbells and followed along with some Tone It Up HIIT YouTube videos. I would do two or three of their workouts three times a week (would up to five if I didn’t have soccer twice a week). These workouts were an easy toe-dip into what was to come, and an excellent way to measure my cardio levels. Once I felt confident enough that I’d be ready for the next step, I chose to look for a workout program that I could purchase that would help me accomplish my fitness goals.

I decided to purchase this one from Kaylee Eulom, who I’ve followed on Instagram for many years and was thoroughly impressed when I received the 68-page document. As some of the workouts require gym equipment we don’t have, I went in and made adjustments that would ensure I was still getting the same results I would get if I were going to the gym. In the end, the $40 I spent on the workout program felt a lot better than the $40/month I’d be spending, on top of the gas and time I’d waste commuting to the gym. 

Is a home gym right for you?

There is something to be said about the fact that self-motivation plays a considerable role in your fitness regimen. The moment you decide that you’re going to work out at home, you have to be aware of the fact that you might plateau in different ways than just based on the weight of the dumbbells you lift. 

For now, we are working with what we’ve got, and sub in extra dining room chairs for seated movements and tricep dips or using our agility ladder for cardio warmups instead of the treadmill. 

In the future, we’ll invest in what we feel we need when the timing is right, both physically and financially. Until then, my focus is on learning to find joy in workouts again, and our home gym is making that possible a lot more quickly than a gym would.

The post Is a Home Gym Right For You? appeared first on Mixed Up Money.