How do you allocate your savings?

We've been aggressively saving for a down payment over the last few years and now that that's done I am curious about how other people split whatever savings they have on hand. Percentages rather than dollar figures are fine, of course, but please share whatever you are comfortable sharing and maybe a bit about your situation/priorities if that gives insight into why you do things the way you do. I am supposed to meet with my financial adviser on this later in the month and want to have some ideas.

These are the things I have in mind:

- we are happy with our mortgage payment per month and feel no need to accelerate/pay down anything more than we do seeing that our rate is so low
- we have well funded retirement accounts, so this isn't a huge priority (although we can't let it slide entirely either)
- we need to set up savings accounts for the kids' education (our kids are 3, 1 and unborn so we do have time, but need to at least get it all fired up!)
- not sure what we really need for emergency savings or whether we can rely to a large part on lines of credit
- our priorities will likely be: funding the kids' education accounts and/or setting up trusts if those are more flexible and/or advantageous from a tax perspective; having a home and car renovation/repair fund for unexpected issues that come up and for the little projects we want to do around the house; emergency funds, possible in TFSAs or some other easily accessible vehicles; a smallish investment fund we can put into the market and take some risks with.

Not sure if I'm missing anything or on the wrong track altogether. How do you allocate "excess" money on hand?
 11 Apr 2012 11:13 AM
 27 Apr 2006
Raving Lunatic
Our savings is about
-RESP $100/month/child
-RRSP - spousal $50/biweekly
~$4000/year (on top of what DH does through work and my pension)
-Daycare $360/biweekly (until mat leave is over)
Everything else has been going into our emergency savings. We now have almost 1 year saved up. So we're considering other priorities, but nothing will change until September and I know what's happening with my job situation.
My hope is to
a) Save up for a small vacation
b) Start up a reno/new car fund (actually it is technically already started).

Probably the rest will move into RRSPs, TFSAs, and we'll see what else.
 11 Apr 2012 11:49 AM
 7 Oct 2011
DH and I both have defined benefit pensions (for the moment at least) and we have a healthy amount of RRSP set aside.

At the moment our savings look like this:

We contribute $200 per month into a family RESP.

We put $250 per month into canada savings bonds (right off my paycheque) and used for trips mostly but also use for unexpected expenses.

We each put $250 into our TFSA monthly. The goal is to keep this for retirement but wouldn't be against using it for an emergency.

We put $345 into ING accounts for property taxes, licenses/plates both cars and to save up for Christmas/Birthday gifts.

We are also paying off some debt at the moment. Once that is cleared up, I'd like to use that money for home renovations and an actual emergency fund.
 11 Apr 2012 12:25 PM
 7 Nov 2009
 I think it's obvious.

Right now I put some money into my RRSP every second week. I need to increase this as the amounted deposited into my RRSP hasn't changed in about three years. I am a low risk investor, so my RRSP is invested in some really low-risk mutual funds. I have a good pension plan, so between the two, that is my retirement fund.

DH doesn't have a pension, and isn't a huge fan of RRSP's (although he does have one). DH is much riskier investor, so he takes money every month and usually invests in a riskier stock or two and manages that. He also puts money into a TFSA that I suppose acts as out emergency fund/home improvement fund.

We also put about $200 a month into DD's RESP. We will so this as well when baby #2 is born. We have also been talking about getting some life insurance for our kids. DH's dad did this for him when he was very young and it was super cheap ($20 a month). DH was actually able to use that money as a down payment on his first proerty.

DH's life insurance is also a savings vehicle. I *think* he pays something like $250/month into life insurance, but that money stays there and grows until he is 65 (as long as we don't need it before then, knock on wood!). At that point he actually can take the money back out as a lump sum. He also has cheaper life insurance that he pays about $25 a month that gives us a better lump sum if something did happen.
 11 Apr 2012 2:18 PM
 7 Jul 2005
 Saskatoon SK
Our amounts are in flux right now with our changing situation.

With respect to our net income we use:
12% for doubling mortgage payments
5% for RESP payments (soon to increase)
8% RRSP payments (mostly DH, soon to be no room for him due to pension allocation of space)
10-15% lately for a minivan fund (ugh)

Here are some thoughts on the things you mentioned...

Your mortgage might be spectacular right now and continue to be so for the rest of time. Or rates might jump in the foreseeable future, to the point where you might be kicking yourself for not having put more money against the principle NOW rather than paying more interest LATER. Our strategy is to double up mortgage payments now because we can afford to, because it reduces the overall amount of interest quite substantially, and because if we end up renewing at a significantly higher interest rate later, it gives us freedom/flexibility then.

RESPs are a great idea. Put in enough for each kid to get the government grant amount each year. Do it early enough to get the govt grant to work for as long as possible for you. My DH would advise not to over-contribute (why would anyone do that?) and manage the funds wisely when you start withdrawing... Something about making sure to take the govt grant amounts out ASAP for the kids, so that if they don't use all the money in the fund you don't have to repay any to the govt. But that's a long way away.

TFSAs are great vehicles for retirement and/or emergency savings. Ideally when you retire, your RRSP-type income should keep you in the same or a lower tax bracket than you were in when you were contributing to the RRSP (to maximize the tax benefits). So some people are better off saving via TFSAs than RRSPs and vice-versa. Your financial adviser should be able to look at your numbers specifically and let you know what would be good for you.
 11 Apr 2012 3:40 PM
 27 Apr 2006
Raving Lunatic
Looking at other people's numbers makes me feel so poor. We just don't have that much disposable income leftover at the end of the month.
 11 Apr 2012 7:03 PM
 7 Sep 2010
We just finished paying off our mortgage in Jan., so our current savings plans are:

$100 biweekly into an RESP (we only have 1 child so this maxs his CESG)
$525 biweekly into TFSAs (we've got some back contributions to catch up)
$100 biweekly into a spousal RSP
$300 biweekly into a personal RSP
$60 biweekly into an employee stock purchase plan
$200 biweekly into a money market account to use for property taxes

All other savings are done as lump sum deposits whenever we have excess cash.
 12 Apr 2012 9:23 AM
 11 Feb 2007
Thanks all - and Jerry, thanks for the US perspective. We actually do have pretty well funded 401ks from our time in the US that we are leaving alone for now...the last thing I want to have to turn my mind to is dual-track financial planning but I will have to tackle it sometime

Teacher_Wife - don't feel bad! The fact that you save anything is amazing and you should be really proud. Financial situations are just so up and down even for individual families. I was just thinking the other day that DH's income alone has doubled over the last six or so years...mine, by contrast, has effective halved from moving from the US to Canada, and I'm about to experience a serious kick in the pants from mat leave, too! Save in good times I guess, right? smile

I want to explore the idea of investing outside of the retirement savings context but am a little worried; it just doens't seem like the right time in some ways, but in other ways it seems like it's now or never since we are both in our early 30s. TorontoChick, does your husband do all his own trading?

For RESPs and RRSPs, we are definitely only going to allocate whatever gives us the biggest bang for our tax and government bonus buck smile.

Nathan'sMom, my DH just got a stock option grant and it's sooo over my head. I'm just handing that over to my financial adviser and asking him to translate for me!
 12 Apr 2012 12:26 PM
 7 Mar 2012
New Member
I wish I had more disposable income for savings, but as a single income family, its a bit hard. Currently each kid gets $100/mo into their RESP and my RRSP gets $750/mo. My TFSA is pretty low, about $100-$150/mo. I wish it were more but for the time being everyone else is getting paid, so that's good enough for me.
 12 Apr 2012 12:56 PM
 10 Sep 2006
 Southwestern Ontario
I feel poor too, but I try to tell myself this is just our situation for now and we're still young, so hopefully things will improve in the coming years. All our bills get paid and we have no consumer debt, but very little extra.

We have an account just for gifts (birthdays, Christmas, showers, etc) that we contribute $75 to per month. We put about $50 per month into DD's RESP (on average as we just contribute once every few months), $150 per month goes into a TFSA but that's to build a deck, finish our basement, and buy a family vehicle like a minivan as our car will be too small with the next kid. Any extra per month also goes into the TFSA and that can be anywhere from $10 to $100, plus the extra money from 3 pay months after mortgage.

We have no RRSPs yet, and our emergency fund is pretty minimal. Last year we did a single lump payment on our mortgage of $2000 and hope to be able to do the same this year.
 16 Apr 2012 12:44 PM
 18 Dec 2009
Mrs. Spoiled
DH has 3% of his pay taken off automatically and put into his pension and his employer matches it at the end of the year up to a certain amount so he has a healthy pot saved up (about $4k per year). I also already have a healthy retirement savings saved up from over the years.

We both have the following bi-weekly taken out of our account:
- $100 - RRSP's
- $95.00 - emergency fund
- $125 - mutual funds/savings (used for a savings plan right now for children/fun $ for trips etc...)

If there is more leftover when all bills etc have been paid we put it towards savings.
 4 May 2012 3:21 PM
 22 May 2006
We're wrestling with the same decisions as you. We max out RESPs, RRSPs, TFSAs, my pension, etc. We've doubled our bi-weekly mortgage payment and pay the max lump sum each year. We're sitting on some cash because we don't know whether we are going to move or not. Once we straighten that out, if we don't move we'll likely just pay out the penalty to fully retire our mortgage (we still have 2 years left in our term). If we do move, we'll just use this cash towards the cost of the upgrade.

Even though we're sitting on cash right now, I dislike this and am looking fwd to the day that we actually have it put towards a positive strategy. I tend to look at our TFSAs as our 'funny money/emergency pot', so likely won't keep a large emergency fund stockpile. Especially if we decide to retire our mortgage, because then we'll not need a large float.

Last thing - once we straighten things out, we'll just start funneling additional cash into: 1) recreation property (maybe), 2) non registered investments. But my advice is to definitely take advantage of the incentives out there via RRSPs, RESPs, TFSAs before you go non registered.

I'm not sure if that helps. I can share amounts with you over PM if it helps provide more context.
 4 May 2012 5:31 PM
 11 Feb 2007
Thanks F - we actually just met with our financial advisor this week so I have some better of sense of where we'll be allocating things. He is of the view that a recreation property would be a huge waste and if we do ever get to the point where we maximize the tax-advantaged portions of registered investment vehicles (not there yet, sadly...sigh), we should look into trusts for the kids. I would probably pursue this before anything else because just crunching the numbers on RESPs, I don't think even the max investment will take each kid as far as they may need to go! Anyway, something to consider.
 31 Oct 2012 11:59 PM
 30 Apr 2012
New Member

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