Author Topic: Case study: Immigrant in rural Canada  (Read 542 times)


  • 5 O'Clock Shadow
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Case study: Immigrant in rural Canada
« on: February 12, 2018, 08:10:18 AM »
Hi everyone,

I've been a reader of this forum for quite some time now, trying to fit the Mustachian way of life with the particularities of my situation so far. I still have some (obvious) improvements I can do, but I figured I might benefit from the thoughts of eveyone on my situation.

So here's where I am: immigrated nearly 10 years ago, now 31, living with my SO in a house we bought 4 years ago (no kids). 100k$ in mortgage, two cars (more on that later), fully paid, no student loans (thanks European school system). Currently working on paying my line of credit we used to make mandatory repairs on the house (9k$ left). Not considering the house as an investment in any way. Prices in my area (2h from Quebec) are at best not dropping, and selling is a pain, so I don't expect to ever get back the money I'm putting in. However I wanted to have my own place, and I love the sweat equity so it is a giant playground for me.

No real target as far as FIRE is concerned. I know I want to get there, but I don't feel that I have a good enough picture to set a precise target, and as I might soon have kids I don't want to set unreal goals. However I do think that I can improve my spending and get closer. I know the importance of setting goals and the plan is to get enough information to set it realistically and honestly.

Now onto the numbers (2017 report, averaged per month):
Mortgage/Taxes                         776$
House Insurance                 66$
Improvements, furnitures, etc                400$
Electricity (Includes heating)           136$
Phones                       116$
Internet                                 72$
Groceries (includes cleaning stuff ASO)     494$
Restaurants                    123$
Insurance                            84$
Fuel                               396$
Tires/repairs                    167$
Licence                       44$
Doctor, dentist, etc                 33$
Job health insurance                                368$
Drugs                       5$
Life insurance                    199$
Travel                            291$
Sport equipment                 78$
Sports                       122$
Misc                               10$
Other spending            
Clothes                       60$
Misc                               15$
Gifts/Charity                    176$

Living on a combined 100k$ a year, with the following stash:
Combined TFSA: 3000$
Combined RRSP: 19000$
Pension plan: 15000$ for me, nothing available for SO

A few precisions before getting punched:
- I can't shop at Walmart, Maxi, etc..., I actually only have a one (rather small) grocery shop in a 60km radius around my place.
- Two cars for two, yes. I work, she works, and here having a job at the same place is not an easy task. House is inbetween jobs, but with that and sports (more to come on that subject), we average 50000km per year...
- Sports. No way in hell I'm reducing that, I love it, my SO as well, and well... we live in the middle of nowhere so we do have to drive to get there. I actually combine some of the driving with volunteering as a coach.
- Travel. Rather expensive, going back to Europe every Christmas when the airlines are ripping us off. Not smart, but as long as I can have my yearly dose of grandparents visit, I don't care how much I spend on that one. Will be reconsidered in the next few years if I'm realistic...
- Phones. No landline, both phones paid, best deal I could find was 40$ with calls all around Quebec (here a place as close as 15km can be a long distance call...) and a bit of data, so we both switched to that.
- I did my homework for 2018 a few weeks back, plan is:
     - Clear the line of credit (will be done by June)
     - Stash some cash for my SO car replacement (210000km already, so better have some cash ready when it is time)
     - RRSP for me: 3500
     - Employer pension plan: 1800 (+1800 matched)
     - TFSA for me: 1600
     - RRSP for SO: 5800
     - TFSA for SO: 1600

We don't have any Emergency Account per say, jobs are stable, but I do split the savings between RRSP and TFSA to keep some access to our cash. We also save money monthly for what will happen but God knows when (around 6000 per year, right now going to the line of credit) and I clear that to send it to our retirement savings (all in ETF of course, using Wealthsimple) every January.

Now I'm ready for the punching, let it fly! (Oh and if you feel like there's something unclear before hitting, just let me know!)
« Last Edit: February 12, 2018, 01:29:40 PM by BSL18 »


  • Bristles
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Re: Case study: Immigrant in rural Canada
« Reply #1 on: February 12, 2018, 12:40:24 PM »
Looking at the numbers below, I don't see a monthly total - that's pretty critical for really feeling your spending. My math says 4231$/month, or just over 50k/year, so the FIRE stash needed would be almost 1.3 million dollars.

Ballparking from 100k combined salary, you're looking at 76k per year in income, and you're spending 50k of that. FIRE is a long way off at this rate!  Not to mention your TFSA and RRSP savings are not particularly large given your incomes and ages.

Good news - you know where you are (high five for tracking!) and you have lots of room to improve!

Some comments on specific spending numbers....
Mortgage/Taxes                         776$
House Insurance                        66$
Improvements, furnitures, etc    400$     <- WHAT! Split it into 'maintenance', 'improvement', 'decorations' to track and cut accordingly (hint: 1 is a need, 1 is a want, 1 is a luxury)
Electricity (Includes heating)       136$
Phones                                     116$
Internet                                   72$
Groceries                                 494$     <- reasonable. Depending on your purchases, see if couponing apps might help.
Restaurants                             123$     <- could be lower. Are you getting value from this or it is because of poor planning?
Insurance                                  84$
Fuel                                        396$     <- HOLY SHIT. see below.
Tires/repairs                           167$
Licence                                    44$
Doctor, dentist, etc                     33$
Job health insurance                   368$     <- ouch. Any chance you could reduce this? (ie. one family coverage vs. 2 individual)
Drugs                                       5$
Life insurance                           199$      <- Why do you have this?? Seriously, please explain how much/how long/what kind/WHY
Travel                                     291$
Sport equipment                       78$
Sports                                     122$
Misc                                        10$
Other spending            
Clothes                                   60$        <- semi-reasonable if you don't spend it just because it's budgeted. I'd aim to reduce though!
Misc                                       15$
Gifts/Charity                          176$       <- highly recommend you split these categories for 2018. Very different purposes in my opinion!

For cars...
  • good job having them paid off and saving up for eventual replacement
  • even at 50 000km /year, your fuel spending is high. I drive about 15 000km a year, spending 85$ average on gas in a month. If I drove 50 000km a year, my spending would still only be 285$/month. I'm guessing you have issues in the fuel efficiency department, or else just an inefficient car.  Consider the immediate things you can do to improve this: are your tires inflated, efficient driving speeds and braking, buying non-premium gas, good credit card with fuel rewards etc.
  • Long term, please get more fuel efficient car(s) as you replace them. Depending on your particulars, might even be worthwhile to get more fuel efficient cars sooner rather than later for the gas savings.

Travel - what kind of difference in price would it be to travel in late January instead? What kind of difference in experience would it be? Is the trade-off worth it? I'd recommend exploring credit card hacking to fly to europe on aeroplan/air miles/other points.

Phones - not sure what you mean with your exploration... why don't you get the 40$ with calls and data that you found? It would beat 116$/month!

Also, please do explain the life insurance - may be reasonable, may be face-punch worthy. Hard to say without details.

Your 2018 plan looks good overall. Without exact numbers it's hard to say, but with reduced spending and no more debt, you can catch up and max out RRSPs and TFSAs for both you and your SO in the next 3-5 years.
Ongoing goals journal: Over-thinking my way to FIRE
If you're a dual American/Canadian citizen living in Canada and investing in Canadian-domiciled index funds outside an RRSP, please PM me.

Sun Hat

  • Bristles
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Re: Case study: Immigrant in rural Canada
« Reply #2 on: February 12, 2018, 01:11:22 PM »
You need to save more. In addition to your current plan, I would aim to contribute the maximum to your TFSAs. Since it grows and can be withdrawn tax-free, it's too good to leave on the table.

To achieve the additional $7800 ($5500-1600=3900 x 2=7800) savings per year, I suggest:

Improvements, furnitures, etc                400$ $200
Groceries (includes cleaning stuff ASO)     494$ $400
Restaurants                    123$ $50
Travel                            291$ $191
Sport equipment                78$ $50
Sports                       122$
Misc                              10$
Other spending           
Clothes                       60$ $45
Misc                               15$
Gifts/Charity                    176$ $50

Your sports and travel really eat up a lot of your budget, so if you want to keep them and save, you have to cut the other categories to the bone. Otherwise, you're choosing your hobbies over your future.
"You need a little bit of insanity to do great things." ~ Henry Rollins


  • 5 O'Clock Shadow
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Re: Case study: Immigrant in rural Canada
« Reply #3 on: February 12, 2018, 04:09:17 PM »
Thank you guys for the feedback. I'll try to answer precisely each of your questions:

- Your math is right. I started tracking for real last year, have all in Excel now, so I figured after one year I could start cutting off for real.
- Improvement/maintenance are about 300, decoration 100. Tools also in here, as I don't have a family here, even when using the equivalent of Craiglist here, it adds up fast. I'm equipped now, so the rest will be wood and screws and paint.
- I tried Flipp, but the only grocery store I have is Metro, and they don't price match...
- Restaurants are often one breakfast with my SO, plus one with visiting (or visited) friends
- Car subject... sensitive one! Although gas is around 1,20 here, so at 8L/100km and 50000km, I get 4800$. Pretty close. We own a 2011 Hyundai Elantra and a (don't punch yet..) Subaru Impreza 2007 (SO's car). Trying to convince her that the next does not need to have 4x4.
- Job health insurance is mandatory here in Quebec, and it is the family package... So we're screwed until we have kids I guess!
- I went too fast on life insurance. It includes job loss for SO (who works from home with her PhD, so if she's laid off it's gonna be hard to find something right off the bat). We actually talked recently about getting rid of the whole thing, and decided to delay as we think about starting a family. As soon as we have enough stash and mortgage is gone, this will be gone as well. It's basically an (expensive) peace of mind as we're relatively new to the country and want the ther to be fine should anything happen. We started when we bought the house 4 years ago, it's 25yrs term insurance.
- Clothes: we're not that spendy on clothes, this includes work related clothing I had to buy this year (and of course... no thrift shop any close...)
- Gifts/charity is honestly split 90/10. I give a few bucks to kids charity/activities now and then in the community. Gifts are a big part, we both are making the most bucks in our families and as we're gone we want to help the others a bit when we get back. Although I figured it was not sustainable so this year I started planning ahead and having things ready to DIY when I arrive there. More pleasant for me, definitely more worthy for them!
- Travel should be improved, I will have more holidays starting this year so we might have the option of going another time. Will definitely look into that one as it sucks a good chunk of our budget. I have the BNC World master card, with cashback on... travels of course.
- 2018 plan is already done, and all the money we had to put in the house (leaky basement...) that we throw in the credit line will go to our savings.
- Phones: what I meant is that it is going to be 40$ per month in 2018. Internet provider about to change as well, reducing the cost by around 25%.

Sun Hat:
- Furnitures will decrease indeed, so that will help.
- Restaurants will be a battle, SO adopted the Canadian way of life and a brunch is tough to dismiss. But they are pretty cheap, so I guess the visiting friends will have to enjoy my cooking for this one!
- Sports equipement: I think it will decrease. We love sports in general, so we had to buy quite a bunch of stuff. I always try to match and mix, but well, playing badminton with soccer cleats is not easy. Now I think we're done for a few years.
- Clothes will be reduced, had to, but hated to.
- I figured sports, travel and cars would be the first 3 fields of improvement. Sports, I definitely choose that over my future. I need it, and I don't think that quitting (because unfortunately here you don't have all the cheap options that I had when I lived in Quebec) would make my any happier, now or in the future. Travel will have to change for sure, this is an area that has been bugging me... Still thinking about how to make it work. If it was a cruise in the Carribean each year, it would be gone already. But grandparents in their 90s... well, I won't have that in my future. Although as Novik mentioned, they would have us just as happily in January.

A lot of the spending I have is related to the fact that I live in the middle of nowhere (like the mortgage, I included interest and principal in there, as the house is not an investment). I want to use that to my advantage (starting a garden next Spring for sure), but it makes a lot of things more expensive so I was looking for fellow "Lost in the wild" people to see if anything could be done about that. I know I have a mild case of Excusitis because I'm probably the most pseudo-Mustachian guy in my friend circle so I think I'm not doing that bad (Quand on se compare on se console, as we would say here), but I think I look too much at the problem and not enough at the solution.
« Last Edit: February 12, 2018, 04:11:25 PM by BSL18 »

Prairie Stash

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Re: Case study: Immigrant in rural Canada
« Reply #4 on: February 20, 2018, 07:31:59 PM »

You still skimmed over the job loss insurance. Is it to replace EI because she's self employed? Is it in addition to EI?

You're paying $2400/year, what are you getting for it?

Reading between the lines, she makes $500 more than you, is that why you have her RRSP at $500 higher than yours? I'm guessing that's the magic number to bring you to the lower bracket. Up your TFSA, use that as the EF.