Solution: Start paying down the higher rate loans, then use freed up cash flow to tackle the mortgage
Sylvie’s first priority is to find $500 in her budget for debt reduction. She can reallocate $400 from savings and $100 from her $900 monthly spending from food and restaurants. She can use that money to raise her credit-card payment from $500 per month to $1,000. That will repay the outstanding $12,000 debt in 13 months allowing for some transitory interest.
By her mid-50s, Sylvie’s mortgage will be history and at age 62, she will be ready to retire just as Kim is finishing a first degree. Sylvie’s retirement income can start with her $32,880 annual job pension plus a $21,600 bridge to 65.Sylvie’s $127,000 RRSP, currently growing at $2,400 per year with her contributions at 3 per cent per year after inflation, would have value on the eve of her retirement at 62 of $253,000.
Sylvie could retire at 62. She would receive $54,480 including a bridge from her job pension to age 65. Before 65, after 22 per cent average income tax, she would have $3,540 per month to spend. That would easily support expenses of $3,000 after elimination of all debt service, RESP, RRSP contributions and other savings.
Not voting liberal whose virtue signaling policies are not hurting the elites and progressives but are driving the working poor and lower middle class into financial crisis
Better get a handle on it quick, the perpetually rising carbon tax is going up year after year. What people can afford today will be much less affordable tomorrow.
Marry rich.