Our Financial Plan for 2025
Taking a look at how we budget and financially plan as a couple
Getting Started
Back in early December I was out for drinks with friends (all of which are in a long term relationship some with kids some with out) and asked them how they handled their finances. The answers fell in to one of two camps.
- First group have simply combined all of their finances aka their pay cheques go into the joint account and all bills come out of there they have auto withdrawals from their into their registered accounts.
- Second group keeps their personal finances separate and have a joint account for their shared expenses. This second group is where we fall and will be the focus of this article
A commonality for both groups is that there is one person who takes charge of the finances but both partners discuss all major purchases.
One last thing I want to callout is that everyone’s financial situation is at least a little different and as such I believe the process is far more important than revealing exact numbers. Therefore I will build upon our example from last week’s article instead of revealing our exact details.
Last weeks post we targeted 20% savings rate and we are going to keep that for the Mrs we are going to bump up mine to 25%
Using this information paired with the CRAs PDOC calculator we have:
Monthly Breakdown
| Partner | Salary | Target Savings % | RRSP Contrib. | TFSA Contrib. | Net Pay Less Contrib. | Contrib. To Joint |
|---|---|---|---|---|---|---|
| Mark | $10,000 | 25% | $1,500 | $1,000 | $4,446.76 | ? |
| Mrs | $5,000 | 20% | $300 | $700 | $2,899.78 | ? |
Before we breakdown the budget for expenses I want to call out a few things.
- Increasing only the RRSP portion to make up the 20 -> 25% jump will ensure a larger tax return next year
- Mrs RRSP is set to $300 a month based simply to reduce all of her income to below the 2025 federal tax bracket of 15% up to $57,375
- One could argue more should be in the RRSP or all in the TFSA but this ratio is what works for us
The budget
If this is your first year making a budget you will have to do some digging through bank statements and visa bills to get your numbers. Likely you should go back 3+ months to figure out the patterns.
Good news though once you have done this once you can transition over to the tracking expenses method and will have an entire years view for next year.
| Line Item Name | Amount |
|---|---|
| Mortgage | -$2,589.12 |
| Property Taxes | -$250.00 |
| Condo Fees | -$400.00 |
| Groceries | -$800.00 |
| Personal Care | -$250.00 |
| Phones | -$160.00 |
| Internet | -$75.00 |
| Student Loans | -$300.00 |
| Electric | -$90.00 |
| Gas | -$100.00 |
| Transit | -$143.00 |
| Home Insurance | -$60.00 |
| Life Insurance | -$100.00 |
| Car Insurance | -$200.00 |
| Gas | -$50.00 |
| Car Maintenance | -$50.00 |
| Subscription Services | -$75.00 |
| Home Rentals (things like hot water tank) | -$200.00 |
| Total: | -$5,892.12 |
| Total + 5% buffer rounded up | -$6,300.00 |
Now we take our total and allocate to each partner.
| Partner | Salary | Target Savings % | Net Pay Less Contrib. | Contrib. To Joint | Discretionary Spend |
|---|---|---|---|---|---|
| Mark | $10,000 | 25% | $4,446.76 | $4000 | $446.76 |
| Mrs | $5,000 | 20% | $2,899.78 | $2300 | $599.78 |
If the left over discretionary spend seems light to you there are a few things to consider:
- For the latter months of the year once EI and CPP maximums have been reached the partner making $120k will take home an additional $700 a month
- Since both partners are contributing to an RRSP they will both get a tax return
Our Tracker
Our tracker has taken a few forms over the years and our headings have changed but the following has been my go to for the past couple of years.
- I like adding a comment to the headers with many line items to refer to when adding amounts.
- For all of the fixed costs I generally fill them all out for the entire year.
- Non Fixed costs we typically add as we go and review at month end or sometimes add them all at month end
- These are setup to auto charge or manually charged to one of our credit cards and include:
- Groceries
- Personal Care Stuff
- Metered Utilities (gas, electric)
- Gas and Maintenance
- Once this is done whatever is owed to me I withdrawal from the joint and same with the Mrs.
- These are setup to auto charge or manually charged to one of our credit cards and include:
- Gifts Category is for all gifts except to each other
- Miscellaneous is going out for a meal or event or in their most extreme form travel
- These can require extra contributions to joint account and I’ll often leave a comment
I’ve recently been thinking about sharing my tracker, perhaps making a digital product out of it. If that is something you may be interested in please leave a comment on the tracker video over on YouTube. That video will also dig much deeper into the spread sheet taking a look at the formulas.
That’s all for this week folks, thanks for stopping by!
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Cheers ☕