Am I on track …

… to buy a bigger home?



From the June 2011 issue of the magazine.



The goal
Julie and Seth Gregson want to save $75,000 in two years so they can buy a bigger home.

The current situation
Julie Gregson, a 35-year-old stay-at-home mom, dreams of moving into the Sundance Lake area of Calgary. She wants a bigger house with more room for her four children, Jarom, 6, Hannah, 4, Sam, 3 and Deacon, 6 months. “I love hanging out in Sundance Lake with the kids,” she says. “The beach is amazing.” Her husband Seth, a 34-year-old electrician, adds that he likes the fact that there are three schools in the area.

The Gregsons figure that if they sell their current home, they’ll pocket $125,000. But the four-bedroom houses they’re eyeing cost $525,000, so their goal is to save an additional $75,000 in two years so they can put down a hefty $200,000 down payment in 2013.

To come up with the money, Seth can work overtime or Julie can take on a two-year consulting contract for the oil and gas industry. She could work from home part-time, and nearby family members could help with child care. The couple is also building up $1,000 a month in equity in their home and saving $500 a month. They’re considering suspending their monthly $161 RESP contributions for a while, and maybe skipping their monthly date night too. “We’re open to all suggestions,” says Julie.























The verdict
According to Jason Heath, a financial planner with E.E.S. Financial in Markham, Ont., the couple is on track to reach their goal. They’re already saving $500 a month, and the equity they’re building in their home by paying down the mortgage will net them an added $24,000 when they sell. “Those things alone will give them $36,000 in two years.”

To fund the shortfall, the Gregsons have a number of options. Some generate more income, others result in lower expenses. The way Heath sees it, the best way to come up with the remaining $39,000 would be to put the RESP contributions on hold for two years (a $3,864 savings) while Julie takes on the contract job ($40,959 after taxes). These two strategies will net them $80,823 in two years—more than their goal. The extra $5,000 gives them wiggle room. “Date night is the last thing I would give up,” says Heath. “That’s time they need for themselves.”

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2 comments on “Am I on track …

  1. Why would anyone give up the RESP contributions in this situation? Assuming the planner's own prediction comes to pass, they will have an extra $5,000 and have given up two years of saving in the RESP for no reason.


  2. Keep your date night even if it is to go for walks in the park, sit and have coffee/dessert in a restaurant. Go to second hand stores buying what's already out the before hitting the mall. Buy in bulk. Cook your own meals and have the family join in helping, then freeze prepared meals. In the past large families did not have such big houses. The bigger the house the more taxes you pay, as well as heating. You may want to reconsider your opinions. Good luck.


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