Hello everyone!
I’m 21 years old, and I like to think I live relatively frugally. Right now, though, because of the studies, I’m living pretty much paycheck-to-paycheck, as I don’t have a steady, reasonable income (which hopefully will get better once my girlfriend finds a job). I was wondering if perhaps you could help me make more sense of my financial situation and help me towards my dreams... I live in Montréal (Québec, Canada), but I want all the advice you can give me, even from a different-country perspective! All numbers are in Canadian dollars.
My dreams:
• Buying a 3 or 4-apartment building which I could live in and rent the upper floors in Montréal
• Becoming financially independent ASAP
• Getting to work 3 days a week ASAP after the start of my career.
• We do not want children (being a gay couple makes it way more complicated anyway), though we could see ourselves being a foster family. We do want to be able to welcome our ageing parents in the future (at least 20 years from now, hopefully).
My living situation:
• My girlfriend is American, I’m Canadian. We live in Montréal, Québec. She is 20, I am 21.
• I struggle a lot with 5-day workweeks and tend to suffer depressive episodes from being overworked, especially in the winter (I was also taking 17 credits plus 14 hours of work a week, so it’s normal that it would be a lot. Perhaps I could handle a 5-day workweek after my studies).
• My girlfriend’s French isn’t fluent yet, and that very much limits the jobs she can have.
• My girlfriend is American, so she has a study permit to be here. Her degree will be her key to permanent residency, but for now, she does have student loans and needs to pay for healthcare.
Income (this is a bit hard to calculate):
• I make 19$/h doing secretary work, 14h/week, earning an after-deduction paycheck of 500$ every 2-weeks.
• My girlfriend has not gotten a job yet. She will start working this year and we can assume she will earn the minimum salary, 12$/h, 14h/week for an after-deduction paycheck of about 250$ every 2-weeks.
• During the summers, we do not take classes and work our asses off instead. Assume a 1000$ paycheck for me and a 500$ paycheck for her every 2 weeks. This is 4 months of the year.
• We get 600$ every month as a very generous gift from my parents so that we can continue our studies.
• My tax returns every year average 1000$ if not more. They arrive around May.
• Neither of us contribute to RRSPs (401(k)) or TFSAs.
Total approx. after-deduction monthly income: 2100$ per school month, 3600$ per summer month
Total approx. after-deduction yearly income: 31 200$
Assets:
• 8 500$ of inheritance which has gone untouched in a standard mutual fund TFSA (tax-free savings account). I don’t think it earns much, as it is very low-risk… plus they also cost a fee.
Liabilities:
• In the end of her studies, our estimate is that my girlfriend will have about 80 000$ in student debt (20 000$ per year?). I won’t have any.
• No consumer debt, CCs get paid off in full before the end of every month.
Expenses:
• Housing (small apartment): 575$/month
• Heating/hot water/electricity: 40$/month
(it’s the estimate that the company makes us pay every month, so we’re expecting them to lower it significantly and give us a nice credit after a year since we use way less than 2/3 of that)
• Internet: 30$/month
• Phone for me: 30$/month
(looking into prepaid to lower this – anyone has recommendations in Canada?)
• Phone for girlfriend: 50$/month
• Renter’s insurance: 40$/month, or 525 every year paid in July
(Yes, this is OUTRAGEOUS. Our dog is a pitbull-type dog, and even though she’s an old arthritic couch-potato, they charge us triple because “pitbulls are death machines”. We have to be insured through a shitty company called hard-to-insure-me.com, along with the pyromaniacs and criminals of this world. Ridiculous. However, we’re looking to only cover liability and drop the damage insurance – it probably won’t lower it by much though since death-machine bites are covered through liability anyway. (before you suggest them, State Farm, the legendary non-asshole insurers, do not exist in Québec, I’ve looked into it.).
Total expenses for home and utilities: 765$/month (or 725 per month + 525 once a year)
• Groceries: 80$ per week, total 160$ per month
(we’re practical vegetarians/vegans, so we get our nutrition a lot from plants, seeds and nuts – which can still get pricey)
• Transportation for me: 108$ per month (dual-city pass)
• Transportation for her: 50$ per month (single-city pass)
(We take public transportation. We would like to bike everywhere but we’ve found that the passes pay themselves back super quickly, and we’d have to use public transit to get to a lot of places anyway – for instance, my school far away has no biking access close by. We therefore take public transit everywhere and do weekly groceries by bike)
• Donations: 15$ a month (I can’t just ABANDON the child I’ve been fostering in Ghana!)
• Healthcare for her: 120$ per month. Mine is free.
• Clothing: 200$ each per year, or 16$ a month each. Total: 32$ per month.
(We are not shoppers. This is budgeted, but it often pours into the “I need new boots because these have holes in them” to complete the misc. budget instead)
• Dog and cat food, yearly vet visit, litter… : 75$ per month
• “Miscellaneous” budget: 100$ each, 200$ total per month
(This includes anything from toilet paper, laundromat access, replacing winter boots with holes in them, the once-a-decade night out … However, since it hasn’t been long since we moved together, we sometimes have to buy basic stuff like a blender, some home repair tools, a desk, etc… That raises the Miscellaneous budget by quite a bit on some months. I like to think we’ve got pretty much everything now, though.)
Total expenses excluding home and utilities: 760$ per month.
Total expenses per month: 1525$
Total expenses per year: 18 240$.
(Now you might be thinking “she earns 31 000 and spends 18 000, how on earth is she living paycheck-to-paycheck???”. These numbers count my girlfriend having a job, which she hasn’t for the last year or so. Our earning for last year would be more like… 19 200. That extra 1 000 expense can easily be explained by the buying of a mattress, a desk, a blender… )
The idea for the future:
I’ll finish my degree within 3 more years or less, with the promise of a 40-50K job right after. I would probably need a shorter workweek, though. My girlfriend will finish her degree within the next 3-4 years. It’s an art degree, not leading to a particular salary. She does need the degree for permanent residency, though.
Our earnings are not stable. We have to find a different job every summer, and my 19$/hour wage can go down with my new employer (can’t keep the old job, as much as I love it, because internships are sucking my time during the week and my soul as well – gotta find weekend jobs).
I would like your advice in these categories:
• Reduce my expenses
• Figure out how to reach my goals
• How to manage my current and future savings.
If you’re in Canada/a student/in a similar situation and have some tips to share, even though they don’t pertain directly to my situation, feel free to share them! I want, like I said, all the advice I can get.
Summary:
Total approx. after-deduction yearly income: 31 200$
Asset: 8 500$ in a standard mutual fund
Liabilities: about 20 000$/year of student loans
Total expenses per year: 18 240$
Here we go! Unleash the power of the Mustache!!!
