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The problem with online mortgage affordability tools is that they look at just three things – your income, your debt and your projected ownership costs based on mortgage payments plus property taxes and utilities.

What’s missing is the cost of the rest of your life – food, children, entertainment, owning a vehicle and looking after your health.

Mortgage lenders expect you to figure out your lifestyle spending after you’ve bought a home, which is how new owners have done it for decades. A better way is to assess the affordability of the lifestyle you want to live before you buy. Let me introduce you to an online tool that can help in this analysis. It’s called The Realistic Affordability Budget and you can download it right here.

An earlier version of this worksheet appeared in a newsletter a few years ago. It was developed by high school economics teacher Matt Jaekel after he and his partner bought a house. Now, Mr. Jaekel has updated the worksheet to reflect his experience as a homeowner.

The 2.0 version invites you to add your net monthly income and then lays out a detailed list of expenses covering housing, food, transportation, entertainment, travel, gifts and charitable donations and savings/investments. Estimate a frugal and less restrained level of spending in each category and then let the worksheet show how much money would be left at month’s end under both spending models.

Mr. Jaekel’s worksheet is available in French, Mandarin, Punjabi, Spanish, Hindi, Arabic and German – his students helped with the translations. If you already own a house, give it a try to see how changes in spending would affect your finances. If you’re in the market to buy a home, figure out your price range and mortgage payments and then see what lifestyle you can afford.

It’s great if a lender says you qualify for the mortgage you need. But what about the rest of your life?

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Rob’s personal finance reading list

Food inflation backlash

Food inflation has eased to the point where it came in at 2.4 per cent last month. But the cumulative effects of two years of soaring food prices created a lot of anger and frustration. So much so that a boycott of the Loblaw grocery chain is being organized. Meantime, Loblaw says it’s “making efforts to lower food prices.” Social media is full of posts by people who are frustrated about the high cost of food.

Mortgages: Variable or fixed?

Here’s a look at where we are with mortgage rates as we approach what could be a busy spring for sales. Fixed rate mortgages have started to edge below 5 per cent in some cases, but what about variable-rate mortgages? If the Bank of Canada starts cutting rates, could they make sense? The answer isn’t as simple as you might think.

Business owners and the CPP

A case is made here for incorporated business owners to contribute to the Canada Pension Plan, both the employee and employer amounts. It’s argued that choosing to pay yourself in dividends as a way of avoiding CPP contributions is a mistake.

A daughter demands: Buy me a house

A money advice columnist fields a question from a mother distraught over her daughter’s demand that the mom’s new wealthy husband buy her a house. Families and money can be such a volatile subject.

Reader comment

“Re the EQ Bank prepaid Mastercard – because you reviewed it favourably last July, and we had an EQ Bank savings account already, we got the card for a recent trip to London. My husband used it mostly from his Apple Watch. Worked perfectly for all kinds of purchases, from tapping on and off the Tube to tea at the Ritz. We’ll stick with our high-cashback BMO credit card at home, but now there’s no reason to pay the 2.5 per cent [foreign currency] surcharge abroad.”

Do you have a comment or question for me? Send it my way. Sorry I can’t answer every one personally. Questions and answers are edited for length and clarity.

Tools, explainers, guides and charts

A summary of credit union deposit insurance plans in all provinces, with links to get further information.

The Money-Free Zone

Robert Lester Folsom is a singer-songwriter who personifies the sad and lonely guy. Here’s what could be his theme song – Lonely, with some snappy guitar to lift the mood. The song appears on a just-released album of Folsom material called Chunka-Chunka, which is ironic in that there isn’t a lot of chunka-chunka in his music. I mentioned another Folsom song a while ago, See You Later, I’m Gone, probably his best.

Watch this

In a video for Fraud Prevention Month, Interac uses a somewhat odd boxing metaphor to dramatize the battle against fraudsters.

Listen to this

RBC economists talk about why it it’s so hard for renters to save money and buy a home.

On social media

David Chilton announces he’s doing an update of his book The Wealthy Barber, one of the great books in personal finance.

In case you missed these Globe and Mail personal finance-related stories

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