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Situation: With a new baby, woman quits her job while plans for private schools limit savings Solution: Extend amortizations to allow for private school costs, mom returns to work to save aggressively

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In Ontario, a couple we’ll call Esther, 23, and Mike, 27, live with their new baby. They have monthly take-home income of $5,650, a house worth about $300,000 with a $206,000 mortgage and a $240,000 rental property with a $186,000 mortgage. Their plan is for Esther, who is an office manager for a small company, to be a stay-at-home mom raising what they expect will be two children. Mike, who runs a house contracting company, will have to carry the family’s financial load. They expect that their children will go to religiously oriented private schools. They want to buy another rental property for retirement income.

That’s the plan, but there are four decades of work and saving ahead. They are aware that building so much on one income is risky. “How soon can we meet our goals on a single income?” Mike asks. “Are we stretching our finances by buying more property?”

(E-mail andrew.allentuck@gmail.com for a free Family Finance analysis.)

Family Finance asked Daniel Stronach, head of the Stronach Financial Group in Toronto, to work with Esther and Mike.

“Mike and Esther have done all the right things,” Stronach says. “They bought a rental property, then increased the mortgage on the property to get money for a down payment on their own home, then rented out the upstairs portion of their home. That’s creative finance.”