View of the Machu Picchu archeological site in Cuzco, Peru Friday, Jan. 29, 2010.Martin Mejia/The Associated Press
By Rob Carrick
Here's how crazy the housing market is in some Canadian cities these days. A 26-year-old who just bought a home with her husband in Toronto is recommending that people start saving for a house in their teens. Otherwise, she says, you'll have to ask your parents for money or not live in Toronto.
She's right. Housing is so expensive that you have to sacrifice the best years of your life – the years when you're young and free of responsibilities like mortgage payments – to save up. Poll results suggest millennials are keen to own homes, and why not? They've seen prices rise, and felt the pressure from their parents to get into the market.
Let's not get complacent about millennial home buying, though. Though they may want to own a house, the reality is that some never will. Already, millennials are adapting. A Toronto couple named Andy and Amy have decided to raise a family in a condo. And then there's the counter-narrative of what millennials want. Rather than steady jobs and home ownership, some are choosing to travel.
My wife and I have two sons, aged 22 and 19. I'm suggesting they save in the near term for travel, not buying a home.
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Rob's top web links
A golden era of investment returns is over…
> The global consulting firm McKinsey & Co. explains why investors may need to lower their expectations for investment returns in the years ahead. Important reading for investors wondering what they should be looking forward to.
…and so is the American dream
> A father worries his daughter's losing out on the opportunities he had for upward mobility. A smart take on the pessimism being felt in both the United States and in Canada about the middle class.
The outlook for mortgage rates
> What to do with your mortgage if rates stay flat, and what to do if they rise modestly.
Cut costs, save money
> No, you won't be nagged here to stop buying a coffee every day. You'll get a better bang for your buck if you reduce the investment fees you pay.
Financial doom for groomsmen
> A survey finds that groomsmen pay higher wedding-related costs than bridesmaids, partly because bachelor party spending exceeds bachelorette party costs.
These are the top cashback credit cards
> Forty-eight cards were rated; here are the top choices from HowToSaveMoney.ca.
Today's featured investment tool
How badly would you be hurt if housing prices fell hard? Our Housing Price Correction Calculator will give you some ideas.
Ask Rob
The question: "How can I stop obsessively worrying about my finances? I have been working in a full-time contract position with a good salary for the past three years. My partner is looking for work and back in school part-time. We have built up an emergency fund, rent a moderate apartment in Toronto and live within our means. We have a budget that we stick to and review regularly. Despite all of this, I have the constant feeling that we will hit a financial crisis and crumble."
My reply: I often find it's the worriers who need to worry the least. But never mind that. You obviously need a full assessment of where you stand financially. I suggest you find a fee-only financial planner to answer your questions and design a roadmap to get you where you want to be. Fee-only planners charge hourly or flat fees that can be scaled to the amount of advice you want. If you can't find one of these planners, e-mail me at rcarrick@globeandmail.com, and I'll try to help.
Do you have a question for me? Send it my way. Questions and answers are edited for length.
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