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Learning, Sharing, and Teaching => Ask a Mustachian => Topic started by: BeesKnees on November 27, 2014, 05:58:24 PM

Title: Case Study: Just starting out (aka: better late than never)
Post by: BeesKnees on November 27, 2014, 05:58:24 PM
Hello folks,

I've been a long-time reader of MMM and the forum, but never really posted as I didn't feel I had enough to 'work with' (likely silly, I know). For the past 6 years I've been working on my PhD (coursework, comprehensive exams, qualifying paper all done...just a chapter and a half to go! And, well, defending). During that time I worked part-time, keeping expenses low out of necessity (Up until a year ago I averaged about $1000 'take home' a month, the past year it was closer to 1500-1800, depending on the month). Just the other night I received a job offer that is full-time/permanent as a researcher (gov't) in an area that is pretty darn close to my field of study (it's not my dissertation topic, but it would fall under my home department). Combining a decent starting income for my first ever FT job (yeah, at 30...), plus what knowledge I've gained from MMM - I feel like I've won the lottery.
So, here's the details:

Me: a lady-stach, living in Ontario, married (hubby is from the US - just moved to Canada about 7mo ago), no kids (no plans to have kids). I'm only posting my income/costs here as DH is working part time (still searching for work after moving here) and he makes enough to pay half the rent, his car insurance (paid off Corolla, a 2010 or 2011), gas, and stash 100-150/mo away in his own savings. Things will change once he gets something a little more stable.

Soon-to-be Gross Income: 59,750
Savings (regular savings account): 3,000
TFSA: 600
Travel account: 1300 (saving for a trip in September to celebrate post-defence. Want to have the cash to pay it off right away, so have been saving early)
Joint savings: 500 (not very high, I know)

Monthly Costs:

Rent: 560 (my half)
Food: 300 (fluctuates between 280-300/mo)
Electricity: 35 (all other utilities included in rent)
Internet: 45
Cell phones (both of ours): 90 (we're with one of the cheapest Canadian providers, so I don't know if I could get it lower. His plan is more than mine so he can call/text his family in the US)
Bus pass (I don't own/or plan to own a car): 95 (during the non-snowy parts of the year, I ride my bike - there's a decent path, but it isn't maintained in the winter).
Personal (soap, shampoo, etc.): 10...? Not likely that high, since I buy those things pretty rarely, but averaging it out over the year, it's probably between 5-10.
YMCA gym: 60
Other (coffee or lunch with a coworker): 30
Total: 1225

There's also Tenants insurance: 20/mo (though, this years was all paid up front, so it's not a current cost and didn't include it).


No credit card debt, it gets paid off at the end of every month.

Student loans (provincial and federal): 29,500 (accrued during my undergrad. No debt from grad school).
I don't know what the interest rate will be, as they're not in repayment yet while I'm still a student (this will perhaps change in a few weeks if I have to drop to PT status when I start working FT). Playing around with the numbers with an online tool, if I choose to pay it off over 5 years, monthly payments would be around 600/mo, though it would mean close to 6G of extra interest at the end of my payment cycle and I cringe it paying that much interest. I'll discuss with the loan folks to see if it's possible to 'set' the minimum payments at that level, but throw any extra that I can at it (while still saving/investing).


1) Getting that loan paid off.
2) Building up a solid emergency fund
3) Staching some cash. I'm not sure yet if I'll retire early (not to mention that working for the gov't, I'll have (maybe?) a decent pension), but I would like enough of a pile to have 'walk away' money if I needed it. Freedom, I guess. I grew up working-class or working poor, depending on the year (...or month), and struggled during my school, it would be nice build a freedom-buffer.
4) Minor/mini-goal, but it's the only somewhat substantive purchase I have on my horizon: braces. Will likely run me about $3500 after insurance takes a chunk off.


So, thoughts?

Thanks! :)
Title: Re: Case Study: Just starting out (aka: better late than never)
Post by: MDM on January 25, 2015, 06:38:53 PM
Certainly looks reasonable.  The Canadian acronyms don't roll off my fingers as do the US ones, but in general terms
  - Are you contributing the maximum allowed to tax-advantaged plans?  If so, great.  If not, what would it take to do so?
  - Your expenses seem ok.  No doubt there are places to cut, but nothing seems ridiculous.
  - Last year, how closely did your bank balance change match Total Income minus Total Expenses?  In other words, do you really know where all the money is going?