Learning, Sharing, and Teaching > Case Studies

Slight sizzle in my hair from Montreal!

(1/6) > >>

Vince1689:
Hi everyone!

I dont have any specific questions really but I was really curious to see what my fellow mustachians thought of my current situation and what could be improved to help me towards my new goal of ER and acquiring a house in the close future! so here goes:


Life situation: 27 years old, Single (with a girlfriend), no kids, Living in Montreal, Quebec, Canada.

Gross salary/wages: My gross income is 38000$

Net Income: My job gives me a take home pay of 28000$ but I also have a small business on the side that brings me 3000$ net as well. So total Net income is roughly 31k Annually or 2583$/Month. My Salary deductions only include Federal and provincial taxes plus a fee for my union.

Current expenses: (every amount is Monthly)
-Rent: 200$ (will become 300$ this july)(Living with a roomate and my girlfriend)(my GF does not currently participate in expenses since she is a university student)
-Food: 200$ (Groceries for me and my girlfriend)
-Electricity: 60$
-Household: 20$ (Toileteries, soap, cleaning products e.t.c.)
-Cellphone: 80$ (I know this is too high and I wil change this as soon as my contract ends in 1 year)(I welcome any company suggestions to lower the cost, Im with fido)
-Clothing: 35$ (I try shopping only twice a year to keep my clothing somewhat up to date)
-Car Loan: 232$ (This is where my hair is slightly sizzling... I've done this purchase before encountering mustachianism and I now regret this decision extremely...)
-Car insurance: 85$
Car maintenance and fuel: 105$ (this cost will reduce drastically since I will be starting to bike 3 seasons on 4 to work!)
-Entertainement/Restaurant: 100$ (I have a little budget to have occasional nights out with my GF)
-Savings: 350$ (Putting 200$ into my RRSP and 150$ in an TFSA for emergency funds per month)

TOTAL: 1367$/Month

Assets:
-Car: I have a Mazda 3 2011 in great shape with only 35000km on it... worth around 10k (I know mustachians hate putting value on depreciating cars but I dont own much so let me have it :P!)
-Chequings: 1600$
-Savings acc: 930$
-RRSP: 500$
-TFSA: 250$
I have just recently woken up from La-La-Land it would seem... I was defenitly in the consumer gang acquiring everything I wanted and not saving a penny... Since I found MMM blog I have completely gone 180... I know I dont own much for now but im really working hard on putting everything in place to start saving and investing!

Liabilities:
-CAR AGAIN!: 11k in the hole... at 4% interest for 3 1/2 years more... I really want to get it paid and keep it since its such in good condition and low mileage... I could keep it for a long time and GPM is at an average of 28... not the best but def. not pick up truck garbage... Thankfully this is the only debt I have.

Specific Question(s):
I would like to have your opinions on anything I could improve and optimize especially on the car and cellphone side. I am currently searching for a better line of work since the one im currently doing is not letting me bring back enough money home... I have tons of experience in construction working many contracts but everything was under the table since I never went to school to have the papers... I have a high school degree and some college courses completed but no college degree...

I'd like to have your opinions as well on investing in canada. right now my total cost of living monthly is 1367$ which leaves me with 1216$ free cash every month that im putting in a savings account to start investing!


Thank you so much for taking the time to read my case study and looking forward to reading your responses!

Your new Mustachian familly member. Vince.

PJ:
Welcome, Vince!

I'm originally from the Montreal area myself, so wanted to be sure to welcome you.

The only thing that really stands out on the expense side of things is your car, which eats up a big chunk of your income all together, but you already know that!  Other expenses are not excessive, but you may still be able to reduce them a little bit here and there - optimize them - to squeeze out a bit more room for savings.  Especially important when your rent goes up in a few months.

The thing that strikes me, actually, is that your rent is SO cheap, and you've only listed the electricity bill - is there no gas, or water bill as well?  The thing is that your housing is relatively cheap, which is why you're managing ok financially.  But your best effort is probably going to be spent on trying to increase your income. 

I also assume your GF has at least a part-time job, and is able to pay for her own clothes, toiletries, haircuts, etc?  Also, when will she be finished school, and will you guys continue in the shared accommodation after that time?  If she's graduating soon, it would be good to start thinking now about your future plans, so that you two don't get sucked into excessive lifestyle inflation once she starts earning more.

Anyway, best of luck to you!

Freedomin5:
You're 27 but only have $500 in your RRSP. My guess is that you have quite a bit of contribution room left in your RRSP. Max out your RRSP, then max out your TFSA. You have a pretty decent savings rate.

Personally, I like TD e-series mutual funds, but you could use any one of Canadian Couch Potato's model portfolios.

human:
Sell the car pay the loan then decide if you really need a car in mtl. Is it for work?

No buses to a metro nearby? if it's for hobbies buy a ten year old civic with 150k km on it. You pay more on your car than rent get rid of the damn thing ready.

I lived in mtl so I have a hard time believing it's for work. I can understand wanting it to move around the island though check out communauto and other services.

jessicat:
I think the car is really dragging you down as well.  If you are going to keep it then I would look at how long it would take to pay it off as fast as you can so that it stops being such a drag. 

Navigation

[0] Message Index

[#] Next page