■ Millennial Money Can Samantha and Leland get their dream house and start a family?

In our Smart Money series, #MillennialMoney, the Star’s Jenna Moon asks people to record every penny they spend in a typical week. Then, using tips from a financial adviser, we challenge them to cut their spending the following week so they can save more money. Will they fail or succeed?

Samantha and Leland’s upcoming wedding has forced them to stop and consider their finances.

The couple, both in their 30s, are tying the knot in December and plan to start their family next year.

“In the next three to five years we’d like to buy a bigger home, ideally without a mortgage,” Samantha says. They currently own their Guelph home outright because they received an inheritance from each of their fathers, who both died this year.

Between them, Samantha, a public servant, and Leland, a fire prevention technician, earn $102,135 per year and take home a combined $5,240 per month.

They prioritize healthy eating, Samantha says, and much of their monthly budget goes toward groceries. Since she works from home, Samantha eats leftovers for lunch each day. The couple cooks together every night and tries not to let their food go to waste.

On weekends, Samantha and Leland often go for brunch on Sundays, but otherwise don’t spend much money. “We prefer long walks in the various green spaces in Guelph and hanging out at home with our cats,” Samantha says.

Can this couple get their dream house and start their family? We asked to see two weeks of their spending to find out.

The expert Jason Heath, managing director at Objective Financial Partners.

Samantha and Leland sadly both lost their fathers earlier this year. They have used their inheritances to buy a home with no mortgage and they are getting married in December. I can imagine this is a bittersweet time for them.

Since they are debt free, they have extra cash flow that is estimated at up to $2,000 monthly if they do not have any extraordinary expenses. This will come in handy as they hope to start a family next year and that typically involves a decrease in income for one or both parents combined with an increase in expenses.

Samantha is a public servant and presumably has a defined benefit pension plan at work. Some long-time pension plan members may not need to save much beyond their pensions to provide a retirement income. Pension plan members also have pension adjustments that reduce their RRSP room. Leland’s income is just barely into the second tax bracket in Ontario, so there is not a strong incentive to consider RRSP contributions over TFSA contributions. That is, unless he has a group RRSP or defined contribution pension plan at work, in which case, I would contribute to those if they have a matching contribution from his employer.

TFSA contributions seem to be a good choice for them for these reasons. Furthermore, with an upcoming wedding and hopefully a baby in the next year or two, they will benefit from having easy access to savings that can grow tax-free and be withdrawn taxfree with a TFSA. I would invest some of their money with a relatively low level of risk given these more imminent costs over the next year or two. They also own their cars outright so there is always the recurring cost of repairs and replacement. They could have some riskier TFSA investments that could provide a better long-run return, albeit at the expense of daily volatility. Three to five years for a potential bigger home is a medium-time horizon where some stock exposure could be worth considering depending on their risk tolerance.

They eat healthy and buy a lot of fresh produce but are conscious that nothing ever gets wasted. If you buy fresh, you need to mindful of what you have and eating it before it goes bad, otherwise, consider freezing it to use it over time. When they eat out, it is Sunday brunch, which tends to be cheaper than dinner.

Given both Samantha and Leland lost their fathers this year, I hope they have their wills and powers of attorney up to date. Given their relatively straightforward family and financial situation, a simple online will could be a fit. But there is also a benefit to having a more wholistic estate planning discussion with an estate lawyer that may be well worth the incremental cost. Life insurance will become important for this couple as they start their family, but in the meantime, they should be sure they have disability insurance at work or on their own. If one of them cannot work due to disability, even though they are mortgage-free, they could be hard-pressed to keep up with their expenses without insurance to replace their income. How they think they did While they spent more overall in week two, Samantha thinks it’s a typical representation of their habits.

The pair feel they’ll be able to use Heath’s advice to prep for the future. Since it mostly focuses on longterm savings methods, Samantha says it hasn’t impacted how they view their day-to-day spending.

The couple is planning to open a joint TFSA account soon, explaining they already put $1,000 per month into a joint savings account. “I think we’ll earmark a portion of those savings to a TFSA to help us reach our financial goals,” Samantha says.

They’re also motivated to get ahead on setting up their wills and estate planning. “I assumed that we should wait until we have children to set something up, but it seems like the sooner the better.” Take-aways Overall, the couple says they were glad to learn about new ways to save strategically.

“We’re excited to work toward our goals while appreciating the very helpful start to our lives provided to us by our fathers,” Samantha said.