Author Topic: Advice on current situation?  (Read 2242 times)

nakedput

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Advice on current situation?
« on: August 26, 2014, 03:09:59 PM »
I am looking for some advice from some bright individuals like you all. I am mainly just unsure about what I should be doing with my money.

Particulars:
Age 25 - B.Commerce graduate
currently make 45k for an insurance company (pathetic wage considering my location)
living at home
expenses = cell phone bill ($60), gas for vehicle, insurance on vehicle, clothes, going out/drinking, etc

Assets:
8k - vehicle - 2010 honda civic
12k - market portolfio - TFSA
2k - rrsp with CIBC
2k - DC pension plan with my current company
1k - chequing
5k - line of credit

Liabilities
8k - canada student loan - 3% interest rate
9k - alberta student loan - 5% interest rate

The student loan has interest deferred until December/14 as I applied for the repayment assistance plan. Currently, I was thinking of just devoting all my energy into paying off as much of the student loans as I can before the interest payments start again. I would than devote tiny payments of $25 towards my rrsp and TFSA bi weekly. However, as we all know, 3 and/or 5% aren't very decent returns on capital. Does anyone have any better ideas for me? Also keep in mind that, at the end of the day, I feel like a kid in my parents home. I would really like to get the F out of here.

Comment as you please. Thank you.

nereo

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Re: Advice on current situation?
« Reply #1 on: August 26, 2014, 03:18:05 PM »
Hello and welcome

ok, a few things. 
Paying off the 5% alberta student loan would be a good, safe option.  No, 5% isn't a huge return but it's guaranteed - something you aren't likely to get anywhere else.
The 3% loan IMO isn't worth paying off any faster than you have to - instead divert that money into savings.
With so little in the way of expenses I'd be plowing as much money as I can into savings.  This may be the only time in your life you have such an opportunity to get ahead.

That said, as you look for a place away from your parents think carefully about where you live and how much you pay.  Commuting and housing are two of hte biggest expenses in most people's budget.

Finally, just to be nit-picky, I wouldn't call your car or your line of credit an "asset".  The car only becomes an asset if and when you sell it.  Right now it's a liability that requires insurance and maintenence. 

Hope to see you around here more
N

nakedput

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Re: Advice on current situation?
« Reply #2 on: August 26, 2014, 03:30:21 PM »
Hello and welcome

ok, a few things. 
Paying off the 5% alberta student loan would be a good, safe option.  No, 5% isn't a huge return but it's guaranteed - something you aren't likely to get anywhere else.
The 3% loan IMO isn't worth paying off any faster than you have to - instead divert that money into savings.
With so little in the way of expenses I'd be plowing as much money as I can into savings.  This may be the only time in your life you have such an opportunity to get ahead.

That said, as you look for a place away from your parents think carefully about where you live and how much you pay.  Commuting and housing are two of hte biggest expenses in most people's budget.

Finally, just to be nit-picky, I wouldn't call your car or your line of credit an "asset".  The car only becomes an asset if and when you sell it.  Right now it's a liability that requires insurance and maintenence. 

Hope to see you around here more
N

correct, I've never considered a vehicle an asset either, but I wanted to consider it in my calculations. If I do get a job downtown, I will no doubt be selling the vehicle and biking everywhere/to work. I also find I am somewhat very up in the air regarding the type of career I want, where I should be living, etc. I want to make a smart choice, but I also do not want to stay at my parents home until im 27 just to knock off a couple k from a student loan.

AssetGrinder

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Re: Advice on current situation?
« Reply #3 on: August 26, 2014, 05:47:05 PM »
I would pay off that 5% student loan first. Then its a toss up between  max out your TFSA or paying your 2% loan off. Build up some decent passive income and then move out. If you can rent a cheap cheap place and get a room mate to keep costs low then go ahead if your sanity is on the line. Just remember no more mommy and daddy to take care of creature comforts at home. Laundry, food, bills.

You make decent money for your age so keep rolling that into investments. Dont be in a rush to grow up and move out as you are building wealth now while your bills are very cheap. Best of luck man!