With twins on the way, couple want a much bigger house

DIANNE MALEY From Saturday's Globe and Mail Published Friday, Apr. 27, 2012 4:30PM EDT Last updated Friday, Apr. 27, 2012 9:00PM EDT

Jeremy and Kate live in a smallish home in a nice part of Toronto with their two-year-old son.

He has been such a joy that we wanted to grow our family, Kate writes in an e-mail. Grow it they will theyre expecting twins soon. Kate is 36, Jeremy 38. Both work full-time at executive-level jobs.

Everything we have needs to expand with our newest arrivals, Kate says. Our small semi-detached house was tight for three, unmanageable for five, she adds. Our car cant fit three car seats and the costs of daycare or a nanny will be going through the roof!

Fortunately, they earn good incomes and are good savers, Kate says. It looks like we are going to need it. To accommodate the children, they want to move up from their existing house valued at $800,000 to a larger one in the same neighbourhood. Estimated cost: $1.5-million to $2-million. Theyll also need a minivan in addition to their car and a live-in nanny, which they calculate will be cheaper than paying daycare fees for three children.

Longer term, they want to make sure they can pay for their childrens education and extra-curricular activities and still have money to invest for their retirement. Kates income will drop substantially during her parental leave.

Can we afford the size of house that we are looking for without changing our lifestyle and sacrificing our savings in light of the expenses that we will be taking on? she asks.

We asked Stephen Osborne, a financial planner at E.E.S. Financial Services Ltd. in Markham, Ont., to look at Kate and Jeremys situation.

What the expert says

Mr. Osborne looked first at how much Kate and Jeremys expenses might rise. A live-in nanny could cost double what they are paying now for daycare, adding another $13,000 to their monthly bill. Next, he raised their food and clothing budget by two-thirds, or $1,600 a month. While that may seem like a lot for two infants, Kate and Jeremy have little in their budget for future childrens activities sports, music, dancing. Their budget is also light on items such as vacations and dining out, costs that will rise as their family grows older. A second vehicle will add another $10,000 a year.

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With twins on the way, couple want a much bigger house