Diana, 34, earns $100K and lives with her parents in Ajax. Is it time to take on the ‘headache’ of home ownership?

Diana grew up in a South Asian household where she says it's common for children to live at home until they're married. Yet the 34-year-old, who lives with her parents in Ajax, wants her own space, though she's nervous about taking on the responsibility of buying property.

I wonder if I should buy a house on my own and have this large, very scary asset, and essentially move out and live by myself," Diana says. The thought of owning a home and the costs scare me a lot ... However, as I get older, I am craving my own space."

Diana earns $100,000 annually working as a controller and has saved $150,000, some of which is in stocks and a registered savings plan. She does not have a TFSA.

Because she lives in the suburbs about 45 minutes from her place of work, Diana says the cost of gas is a constant struggle.

Of course, living at home means Diana can save a lot of money, but she also makes sure she enjoys herself. On weekends, Diana and her boyfriend like to dine out and go shopping. She also likes to hang out downtown with friends.

With wedding bells on the horizon as Diana's relationship gets more serious, she's wondering if it makes more sense to hold off on buying property until she and her partner are married and have decided where they want to settle down.

We asked Diana for two weeks of her spending to see what she can do.

The expert: Jason Heath, managing director at Objective Financial Partners.

Diana comes from a traditional South Asian family where she is expected to live at home until she is married. At the same time, she is 34, she wants to have her independence, and her serious relationship may lead to an engagement and wedding before long.

I think it is important to take advantage of living at home when costs are low to build savings for when you are on your own and your cost of living goes up. Diana is obviously doing that to a certain extent because she has saved up $150,000. She also spends $15 to $20 per day going out to lunch, so packing food from home two to three times a week seems like an easy way to boost her savings.

She also comments on the high price of gas and her frequent commutes from the suburbs in Ajax into downtown Toronto. Ajax has a GO Train that goes right to Union Station in the heart of the city at a round-trip cost that is less than the price of parking in Toronto, let alone gas and wear and tear. So, again, there are always ways to spend less without a huge sacrifice.

I like that Diana pays for everything on her credit card. Collecting points is nice. But having full visibility to see what you spend each month can also help with budgeting.

Diana has $100,000 of her savings in a taxable account. She does not have a Tax Free Savings Account (TFSA). I suspect she has $88,000 of TFSA room based on her age and assuming she has never contributed. She should definitely open and contribute to a TFSA. At her level of income, nearly half of her interest or investment income can disappear to tax.

She should also open a First Home Savings Account (FHSA) and contribute the $8,000 maximum for this year, and plan to do the same for up to the next four years. Contributions will result in a tax refund of about $1 for every $3 she contributes, and she will be able to take a tax-free withdrawal to buy her first home.

There may be non-financial reasons not to buy a home on her own if her relationship is about to move to the next level. In other words, she may buy a home that she and her hopefully soon-to-be-fiance move into together. But what if they ultimately decide to move somewhere else? The cost to buy and sell a home in Toronto is significant between municipal and provincial land transfer tax, real estate commissions, and legal fees. She could always move out and rent if she wanted her own space as an alternative, or have a serious talk with her partner about their short- and long-term future together.

Spending in week one: $455. Spending in week two: $676.

Take-aways: Diana says she was sad to hear that the advice was to continue to live at home.

However, with the rate the cost of living is going, I also understand this recommendation," she says. I recognize I am an overspender with my lunches, and this would be the easiest change for some additional savings here."

Diana says her favourite piece of advice from Heath is to open a First Home Savings Account, which she plans on doing.

Diana says she wanted to know a bit more about whether her income and savings would allow her to purchase a home in Toronto right now, but realizes that it may be a bigger headache than I thought to buy something on my own."

Ghada Alsharif is a Toronto-based business reporter for the Star. Reach Ghada via email: galsharif@torstar.ca