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Vancouver couple struggles to make ends meet on only $25,000 a month


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From the Vancouver Sun:

Meet Eric and Ilsa. Eric, 41, is a physician who works one day a week in a medical clinic, for which he earns $200,000 a year. He works one additional day at a university, for which he makes another measly $100,000 annually.

Ilsa, 39, is a dentist currently on maternity leave who will bring in another $150,000 when she returns to work.

And yet, despite their seeming prosperity, this Vancouver couple can’t make ends meet. What’s to be done?!

The doctor and dentist wrote in to the Globe and Mail recently and their story was featured in Friday’s “financial facelift” advice column, in which experts weigh in on how regular folks can balance their budgets.

According to the Globe:

They are living rent free in a relative’s house (they pay taxes, utilities and upkeep) and “regret not having bought a house years ago,” Eric writes in an e-mail. Houses in their Vancouver neighbourhood have doubled in price in the past two years. The house where they live is going up for sale soon, so they need to move quickly.

Last fall, they bought a building lot for $1.1-million and are planning to build a house large enough for their family and a live-in nanny. But with a combined income of $360,000 ($450,000 when Ilsa returns to work) and an $800,000 mortgage, can they afford the builder’s $1-million price tag? Who will lend them the money?

That is quite a pickle, but in addition to long-term problems around securing enough money to build their Versailles, Eric and Ilsa also have more immediate problems. They seem to be about $6,000 in the red each month, on a net income of $25,000. And despite this alarming deficit, they still plan to send all their children to private schools at a cost of $5,400 a month, just one of their many expenses.

Monthly disbursements: Mortgage $3,800; property tax (both properties) $1,000; utilities $490; insurance $90; maintenance, garden $190; transportation $800; groceries $2,000; clothing $520; children’s activities $1,000; tuition $5,400; summer camp $600; child care $2,800; gifts, charitable $320; vacation, travel $2,000; dining, entertainment $200; sports, hobbies $200; miscellaneous (furniture, toys) $400; health insurance $50; cellphones $220; telecom, Internet $80; RRSP $3,000; professional associations $6,000. Total: $31,160

“Two professionals should be able to afford a modest house, but we can’t get the numbers to work and would appreciate some help,” Eric wrote to the Globe.

To solve their money woes, the newspaper’s expert financial planner, Warren MacKenzie of HighView Financial Group, offers some rather unorthodox advice: namely, Eric working a second day at the clinic, which would boost household income to $500,000 a year and solve all the family’s problems.

Other ideas might also have included working three or even four days a week, not sending the kids to snooty private schools, not sending the kids to snooty summer camps (every month of the year, apparently?), spending less than $4,000 a month on groceries and vacations, or maybe not building a million-dollar mansion before you’ve mastered basic addition.

How Eric and Ilsa didn’t manage to reach any of those same solutions remains a mystery. Then again, nobody said Globe readers had to be particularly bright. They just have to make more than $100,000 a year, so at least Canada’s paper of record is reaching its target demographic.

UPDATE: The Globe added a correction Monday that only makes this couple’s finances more confusing. We are now told their memberships in professional associations only cost $6,000 annually, not monthly, which significantly alters their financial picture. The doctor also says he works “more than 100 hours a week” at both jobs, which would only leave the poor man another 68 hours to eat, sleep, transport himself between jobs, and hug his children. And yet, the Globe’s financial advice remains the same: work more.

UPDATE II: The Globe corrected its correction. Eric now works "up to 80 hours a week," apparently.

Read more: http://www.canada.com/life/Vancouver+couple+struggles+make+ends+meet+only+month/10742014/story.html#ixzz3PKacQYT4

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Aren't these case studies for Wealth Management and Personal Finance courses?

Some of the monthly disbursements really stood out.

600/month for kids summer camp? That's saying they spend 7200 each year for that.

2000/month on groceries? I'm not saying they ought to be having only bread & water, or rice with soy sauce for all meals, but

almost 50k 25k for food per year. Unless they're feeding a household of 12+ people, it shouldn't be the case. Chances are they just buy stuff out of season and don't bother getting their money's worth... like going to those "boutique" grocery stores which buys the same stuff from the same wholesaler, but they mark up the prices ridiculously.

190/month on their currently vacant lot? WTF?

Man, the list can go on....

(edit.... numbers were wrong)

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I wonder what these people would do if they somehow lost their jobs and for whatever reason had to work regular crap jobs for crap pay like most everyone else. Looks to me like they're living in some alternate reality, I kinda hope something brings them back to earth.

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I wonder what these people would do if they somehow lost their jobs and for whatever reason had to work regular crap jobs for crap pay like most everyone else. Looks to me like they're living in some alternate reality, I kinda hope something brings them back to earth.

I doubt they could ever lose their jobs... the medical field basically has guaranteed employment and income, that is once you go through the whole schooling and training over 10+ to be exact.

I just hope some of you aren't jealous or anything even if this is a true story to begin with.

Just think for a second these people were in school for nearly 20 years!

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I don't think this is a serious article, probably some sort of ploy to get people to talk about how stupid this article is to drive traffic to the Globe and Mail. The facts seem way off. That said, a professional couple could very well have trouble making ends meet trying to maintain an upper class life in this city.

I made a joke today to my coworker that my bank account is growing too big living in Vancouver cause I can't afford to buy anything. By the time I have enough money to purchase a detached home (20% down with money left over) I could comfortably retire in other parts of the world and life off dividend income.

Luckily, our rent is dirt cheap relative to the cost of buying. Based on the cost of purchasing we should be paying around $3000-$4,000 for a one bedroom condo downtown.

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