Well hello! I have several questions about this whole Mustachianism/FIRE life, but first, the numbers:
I make $63,000/year, or $3000k/mo. That probably doesn’t sound right to a lot of people, but my pension is almost $200/cheque, otherwise I’d be making $3400 after taxes. I get $1029 at the end of each month as a government payment, which is tax free for the rest of my life, that just started in January from Veteran’s Affairs. I still work in law enforcement in IT. I also live in BC, on Vancouver Island, aka HCOL. I am incredibly lucky, in that I have a 600sq ft studio apartment above a bakery, that is just $900/month (this is EXTREMELY low for this island). There’s 4 units total, each around the same square footage, and each has one person living in it. All four of us share one washer/dryer and it’s coin ($1.50 per machine, which again, is very low).
As I started reading this blog, I started trying to make better decisions financially for myself, before reading enough posts to actually understand what I was supposed to do, so here’s mistake #1: I traded in my 2019 Hyundai Santa Fe for a 2017 Hyundai Santa Fe. I saved $8000 in payments and got a much more ridiculous (feature rich) car in return. They could only offer me $26,000 for the 2019, and I see on their site, they’re selling it for $32,000, leaving me a $10k balance from my initial loan to have to come over. The 2017 Santa Fe cost $17,000, so with the extra $10k, it is $27,000. I’m sure you’re all cringing right now, because I am. I didn’t realize what a mistake I’d made until it was all done. I just tried to research whether I had a right to return, but unfortunately that’s not a thing here in BC, so I’m stuck with this vehicle. I will try to list it, and see if I can get someone to pay off the balance, but anyone that takes 15 seconds to do their research will see what a bad deal they’re getting.
So my first question is: does it make more sense to pay the whole loan down ASAP and then sell it and buy something much less costly for cash? Or just list it everywhere and hope for the best?
Here’s a bit of a cost breakdown:
Car payment: $328 bi-weekly
Vehicle insurance: $118/mo
Fuel: $70 bi-weekly
Internet: $$118/mo
Cell phone: Needs some explanation, so see below.
Power/heat: $130 bi-monthly, so approx. $60 monthly, however I’m waiting to get the latest bill which will tell me how hard my air conditioner had to work during the +40C heat wave us British Columbians suffered through at the end of June/early July.
Renter’s insurance: $33/mo
Line of credit: $0 balance
Credit card number one, with old bank: $0 balance
Credit card number two with new bank: was $18,000, is now $1800 and should be paid off by the end of next month ($500 was new glasses which I’ve desperately needed for some time now, but the pandemic got in the way of that. I’ll be reimbursed, just waiting for the deposits).
No other debt other than my vehicle.
Mistake #2, which to be fair didn’t seem like a mistake at the time, because $80/mo for a cell phone in Canada is a good deal – my cell plan.
A year ago, when I was looking at getting a cheaper cell phone plan, I found out through a western Canadian provider that I could use my employment status with law enforcement to get me onto a specific plan that is cheaper than most.
Monthly cost after tax: $80 (welcome to Canada, ffs)
It gives me 20gb/month, and if I go over, I will not be charged. I also got a $1048 discount on my phone (Samsung Galaxy s20), which I would have to pay $526 of, if I cancelled my plan right now (the plan expires in August of 2022). The rest of the device balance was financed, and I owe $200 on it. I also agreed that at the end of the term, I’d give my phone back, or I’d have to pay $120. I still have my Google Pixel 2XL left over from my previous contract with a different provider, and it still works fine, so going to a pre-paid plan, which on this current provider would be $25/mo for unlimited nationwide talk/text, NO data, is a possibility. So, if I cancelled everything right now, I’d have to pay $726, plus whatever they want to charge me for cancelling early that isn’t related to the device.
Question #2 – is my math right, or is it cheaper for me to just stay on this plan until next August? If I leave everything the way it is, it’ll cost me $960 to ride the contract out. If I pay the $726, then the monthly $25/mo before tax plan, I’d pay $300, which equals $1026?
MSP (BC medical) is paid for by my employer, so $0/mo.
Groceries: $500/mo (I am a single person with a cat, and produce is extremely expensive up here)
Special note – due to extreme space constraints, shopping at Costco really isn’t in the cards. I only have so much space for my stuff, and adding huge boxes of food that typically goes bad by the time I get halfway through just doesn’t make financial sense to me. I also have an apartment sized fridge/freezer, with no space for a deep freeze, so I’m really limited on frozen foods as well. That said, they offer a great deal on gas, typically 10 cents/litre less than every other station in town, so I do pay $50/yr for the membership.
SiriusXM membership: $300/yr, though I’d recently discovered that they have way cheaper plans that they always forget to mention when I call to find ways to get my bill down. I’ll be addressing that this week. I also had the thought that since I don’t have any overages on my cellular data, I could just cancel now, and hook up my phone via Bluetooth to my car’s sound system, and just stream my music while driving in town. The online only membership is like $8/month or something like that.
Microsoft Office membership: $8/mo
Student level Adobe membership: $27/mo
Netflix: $15/mo
Amazon PRIME membership: Ahh, this beast. I order a LOT and so prime is worth it to me. I also watch a lot of the TV shows. That said, I won’t die if I have to cancel it, and frankly, I really should stop all the wild shopping I’ve been doing lately. There are other ways to comfort myself during times of extreme stress, which in this job, happens a lot, like going for a walk! And it’s free! $80/yr
Cat food/nail trim: $50/mo – caring for this cat is non-negotiable.
Here’s another question that I can’t seem to find an answer to anywhere in the YT space for FIRE videos, or blogs or anything: does it make more financial sense for me to move to the Calgary area (different province, WAY MORE winter, WAY CHEAPER housing costs) and buy a house while on this journey? Or continue to rent (the max a landlord can up your rent by is about 1.3%, according to a calculator I just found. I also saw an article that says something about how all rental increases have been put on hold due to the pandemic, but it’s not yet clear whether that’s still right. So, is it better to stay on temperate Vancouver Island, where I could easily start biking to work, in my town of 66,000 people, or move to a city of over a million, that is very car dependent, where the average condo price for way more square footage than I have now is about $150,000, which is nigh on IMPOSSIBLE to find here on the island? Everyone seems to think home ownership is the way to go, and as a life long renter, I am DYING to quit sharing walls and have autonomy in my own home, where I am free to change wall colours or just eliminate non-support walls completely. I have always wanted a freestanding house, and unfortunately, prices for those both in Calgary and here are around the same, so it’s condo or bust at this point. Or, rent?
I really have to wonder whether or not there might be a third option: instead of going for the retire early part, because frankly sitting around doing nothing does not work for me, what if I just saved up a few years worth of expenses, quit this job, and then work somewhere else that makes me happy, which could end up making me more money than I make now? Does that make sense?
Finally, the part where I expect all the yelling to come from: this particular town only gets snow for about a week, maybe 2, each year. Otherwise, it just rains a lot. I also happen to live just 10 blocks from work (3.6k or 2.4mi), so getting a little electric scooter or a tiny motorbike of some kind would be a vastly cheaper option. If I figured out how to get rid of my current vehicle and buy a cheaper one in cash that I’d only use every once in a while (I never travel anywhere, so I don’t have to worry about road trips), then I could just scoot to work, and still go home for lunch each day. So, I expect the yelling to come from me owning such a wildly expensive vehicle and still driving to work, when I live so damn close.
Oh, and I’ve also eliminated one subscription and one other frivolous expense: no more Disney+ (cancelled last night, will reactivate when the Mandalorian s2 comes out, will cancel again once all episodes have been binged), and I’ve stopped going to McDonald’s twice per day for coffee (xl in the morning for $2.40, and large at lunch, for $2.10, saving me an insane $135/mo.
Let the yelling begin.
