Every family has to manage money. We all spend on both necessities and non-necessities. We all need to save, and many of us want to invest and prepare for the future. We all need to fit these needs into the constraints of our income. People in different places meet these challenges in different ways, and we’re looking at some of those differences in this series on budgeting around the world. In this installment, we’ll look at the financial choices of a family of 3 in London, Ontario, Canada.
Canada is a highly developed nation with abundant resources and a relatively small population. It has a modern economy and a high level of social services. London, Ontario, is a medium-sized city with a population of just over 500,000. It’s a fast-growing city with a diverse population. The economy is also diversified, with agriculture/food industries, high-tech manufacturing, IT, and health all generating significant employment. The cost of living is lower than comparable costs in nearby Canadian cities, with prices (including rent) around 20% lower than those in nearby Toronto and 10% lower than Ottawa.
Did You Know
- The average salary in London, Ontario is C$65,872 (US$52,335)/year, for a take-home pay of approximately C$49,620 (US$39,423) or C$4,135 (US$3,285)/month.
- Canada has a progressive income tax with combined federal and provincial tax rates ranging from 15% to 33%. Pension and employment insurance contributions are also deducted, with total deductions reaching 25% of an average worker’s salary.
- Canada has a universal publicly funded healthcare system.
- The unemployment rate in London, Ontario is 13.1% (in February/March 2021).
What Does it cost in London, Ontario?
- 3-course meal for 2, mid-range restaurant: C$80 (US$63.56)
- Beef round, 1 kg: C$15.69 (US$12.47)
- Domestic beer, .5 liter: C$6 (US$4.77)
- Broadband Internet: C$73.65 (US$58.52)
- Cinema, 1 seat: C$7.93 (US$6.30)
- Monthly public transport pass: C$85 (US$67.53)
- 3 bedroom apartment, city center: C$2,212.50/month (US$1,758)
On the “Big Mac Index” Canada ranks 6th out of 56 countries surveyed, with the iconic burger costing the equivalent of US$5.29.
Getting to Know the Household
We started our interview with some basic questions about the household, their lifestyle, and their approach to managing their finances.
Introduce yourself – Tell us a couple of things about yourself so we get to know you better.
Married, parent of 1, business owner, investor, lender.
Location – Where do you live (city, country)? What kind of place is it? How do you like living there?
London, Ontario, Canada.
Household structure – How many adults, kids, what ages?
2 adults (36, 37), 1 child (10).
Occupation – What do you and other adults in the household do for a living?
Business owner. Single income.
Net household income – What is the take-home pay of your household (income after taxes and other deductions)?
250k (US$198,626) gross. Closer to 200k (US$158,901) net. Income is split among different entities within my structure.
Sources of additional income (monthly and annual) – List any sources of income other than your salary.
Business income, rental property income, private lending income.
How would you describe your standard of living? – Based on the place you live in, your income, compared to other people around you…
High standard of living. I can splurge on big ticket items comfortably.
What is your approach to managing your finances? – What is your general approach or personal philosophy on managing your finances? Do you use a budget, and if you do – do you generally stick to it? How do you make financial decisions in your household?
No budget. I pay my savings first. Always.
I funnel all income into paying down my HELOCs for reinvestment, keeping only a small amount for necessary expenses.
Let’s Break Down the Expenses
Now we’ll break down our respondent’s monthly household expenses into different budget categories.
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Mortgage C$400 (US$318)
Taxes C$375 (US$297)
Snow/lawn C$125 (US$99)
Maintenance C$100 (US$79)
Gas/heat/hydro /water C$300 (US$238)
Cable/Internet C$100 (US$79)
Phones C$100 (US$79)
About C$150 (US$119) a week in groceries. We used to eat out a lot, but the new health kick plus COVID has meant my wife and I cook now.
Gas C$150 (US$119)
Insurance C$250 (US$199)
🏦 Debt & loans
Depends on my lending.
All my debt except for my mortgage produces income. Currently, there’s about C$400/month going to the HELOC interest. That debt currently produces C$1450/month on an interest-only private mortgage it’s lent on.
1 child. Coding classes.
👗 Clothing and personal care
C$100 haircuts (US$79)
C$100 misc clothing (US$79)
🧹 Household supplies
These would be included in groceries.
Food for various pets
C$150 life insurance (US$119)
C$50 home insurance (US$40)
No expenses due to COVID.
Roughly C$9k (US$7,151) is saved a month, but I also give myself an end-of-year bonus of C$50-100k (US$39,725 – 79,450).
* All figures are as reported by respondents. Totals may not add up to 100%.
📘 We only included the categories in which this particular household has any monthly expenses. View the full list of budget categories we used for this survey, along with what’s included in each of those categories: 110 Budget Categories.