Author Topic: Case study perhaps? Life long spender and recreational enthusiast..  (Read 3209 times)

mercenary

  • 5 O'Clock Shadow
  • *
  • Posts: 4
Hi folks.  I am so new to this so go gently on me....or not....

So here I am...41 years old, a certified tradesman making good money in northern BC.  I've read a few of MMM's blog articles and generally agree with the principle.....however...the application might not work for me.

A little bit about me.  I'm married to a wonderful woman who is a Paramedic.  Our combined income is around 130 thousand CAD per year.  We own a home worth 130k and have 70k left on the mortgage and a payment 0f 850 per month.  I bought a truck a couple of years ago but still have 5 years left on the loan which costs around 600 per month.  My wife drives an older Jeep Liberty with a small loan on that which is around 180 per month.

Here is a big kicker.  Neither one of us works in the same town where our house is.  My wife lives and works 2 hours from home and I live and work 3.5 hours from home.  Our little town's economy cratered in the financial crash of 08 and we've been unable to gain employment in our home town ever since.  I pay 630 per month for a batchelor pad apartment and my wife pays the same for a small duplex.  Our combined mortgage and rent payments are over 2100 per month.  Yikes!

Our gasoline bills are ridiculous too.  I spent over 6000 dollars last year in fuel alone.  My wife was around 3000.  Another yikes.  Combine that with our insurance payments and maintenance and we've got a huge vehicle bill at the end of the year.

So.....where to go from here.  I know that my best bet would be to move back to my home town and actually LIVE in the house I own.  However...gaining employment back there seems to be an impossible task.  We might be able to sell the house and move further north where I work....but housing costs up here are prohibitive (oil and gas boomtown) so the money we'd save by getting back down to one household would be eaten up by the new mortgage payment.  The equivalent house to mine here is well north of 400K.  I just can't see moving here as a viable option.

I could relocate south to where she works.  Again though...we'd be starting over on the mortgage.  Houses down there are 250k-300k and jobs are at a premium too.  In fact...everywhere I look and think I'd like to move to....housing costs become the major stumbling block.  House prices are ridiculous in Canada right now.

Another issue that I have......I LIKE driving!  I like it a lot.  I do it for recreation.  I'm always up for a nice road trip and I own an ATV for fun bush exploration.  I'm not sure I'd ever want to give that part of my life up.  I know it costs a fortune...but what do you do when you're faced with a hobby that you enjoy so much that you KNOW you'd miss it terribly if you need to give it up?  Also...I drive to work everyday.  Its not a particularly long commute at just over 10 kilometers but winters around here typically get down into the -30 to -40 degree range.  I'd move to a warmer climate....but again....housing costs.....

So I know there is room for improvement....but it feels hopeless.  Any ideas?


marty998

  • Walrus Stache
  • *******
  • Posts: 6491
  • Location: Sydney, Oz
You earn $130k, Mortgage and rent is $26k, Car payment $9,500, Gas $9,000. Where is the rest of the money going?

I don't believe a $400k house is a stretch on your combined incomes. You have $60k equity on your current home to use as a deposit, and you should be able to save anywhere from $40-$60k each year to bump that up too.

dude

  • Handlebar Stache
  • *****
  • Posts: 2368
Have you done the cost-benefit calculation of renting vs. owning? It could be that selling your house and renting much closer to where you work might result in significant savings?  Which you could then save and invest for a time in the future when you may be ready to buy again.

Thegoblinchief

  • Guest
I'm assuming you need the truck since you're a tradesman, but getting a fuel sipper for the long drive back to your house on the weekends may pay for itself if you get it cheaply enough.

I personally couldn't stand that much driving. Sure, I love road trip vacations, but structurally as a part of my regular life? No thanks.

"Starting over on the mortgage" isn't your only option. Plenty of FI individuals rent long term, especially in overheated markets like much of Canada.

MissStache

  • Pencil Stache
  • ****
  • Posts: 710
  • Age: 37
  • Location: Washington, DC
It sound like both of you have jobs that are somewhat flexible in their locations- surely paramedics and craftsmen are needed everywhere, right?

If I were in your position, I would have one of us relocate to the other one and live there full time in a rental.  I'd start renting out the house you own now.  When it comes time to retire, you could move back in to the house you own, or keep it as rental propery and drive all over the continent to your heart's content :)

For the hobbies, many of us here on this board have expensive hobbies that we won't give up.  The trick for me has been to cut back in other places so I can still enjoy something that is really meaningful to me. 

TokyoLotus

  • 5 O'Clock Shadow
  • *
  • Posts: 24
How about renting out your house?

mercenary

  • 5 O'Clock Shadow
  • *
  • Posts: 4
You earn $130k, Mortgage and rent is $26k, Car payment $9,500, Gas $9,000. Where is the rest of the money going?


While we did earn 130K last year...that certainly wasn't the NET income.  Taxes are pretty high here in Canada.  However, given that you're from Australia I think you know all about high taxes....

Without breaking the numbers RIGHT down we took home slightly more than 70k.  Our mortgage and rent doesn't include things like heat and electricity...which become phenominally more expensive in the winter.  We're near 3K a year in heating costs for the 3 places alone.  Food is quite expensive up here as well.  Our food budget is 600 dollars a month on average.  We do eat out quite often....which is terrible for health and the wallet...so probably another 2-300 dollars on that per month.  Our cell phones cost a fortune up here....our internet for three places....on and on.

Its not all bad.....I do save 250 per paycheck into my TFSA.  My wife puts away an additional 100 per pay into hers.  So there is a savings.  Having no credit card debt or any other real debt besides the mortgage and the two vehicles helps out significantly.  If I want something...I save for it.  Period.  You all are going to laugh....but I just saved up enough money to buy myself a brand new ATV right off the showroom floor.  Totally antimustachian......but I did save the cash rather than go into debt....so its a little bit Mustachian :)

As for renting the house out....well....I am still really on the fence about that.  There are SO many horror stories out there about people trashing the places they rent.  It's tough to find decent renters out there IMO.  I would not be comfortable renting my house out to anyone.  I'd sell it first.

As for our jobs being flexible.  Mine is a bit more flexible as far as earning the same money is concerned.  Her job is kinda bizzare in how they get paid.  She couldn't move up here and earn the same money as what she earns down south.  Sounds wierd but she is considered part time (although she works WAY more than full time hours usually...) Unfortunately...those hours tend to dry up the further north you go.  And the pay structure gets all wierd when you move into smaller communities as a paramedic.  As I mentioned...I could move to where she lives....but jobs in MY trade are really at a premium down there and there are plenty of tradespeople who commute to other cities for work and live down there already.  Its not outside of the realm of possibility that I could find work down there, but there are lots of guys already ahead of me in that line.

Obviously there is huge room for improvement.  I know I can reduce my cell phone bill.  That frikken thing is downright stupid.  The eating out budget should be tweaked down to almost nothing...as its too unhealthy to begin with.  The major key will be moving back to my home town...getting back to work down there and saving tons of cash that way.  So far I've had no luck with that but it doesn't mean I'm going to quit trying.  The fuel bill likely won't change much....in fact...it will likely get more expensive as the price of fuel increases....as it is going to do....we all know it.  I don't want to buy a cheaper car as having three vehicles to insure isn't my idea of fun.