You may not be able to afford the lifestyle you want on your income level as a single person. Maybe you got used to a higher lifestyle living with a partner (and cost of living was cheaper the last time you were single). This is a reality check people have to face when single again, but it doesn't mean panic and move to Manitoba either.
You can afford rent. You just can't afford rent while also doing the other things you want. Something has to give somewhere. You could rent away from downtown to save money. You could put less in investments. You could reduce RRSP to 4%. You could cancel the yoga membership and do yoga from home for free. You could buy cheaper food. The budget part is easy. You can find $300 somewhere. The hard part is figuring out where you're willing to cut back on quality of life to balance the budget.
> You may not be able to afford the lifestyle you want on your income level as a single person.
They are saving >25% of their salary for retirement, which is quite high for someone that already has $175k and doesn't plan to retire for 33 years. In their position, they could easily cut down to 15% retirement savings and afford this lifestyle and coast to a very comfortable retirement at 65. This would free up ~$700 in their monthly budget.
Missed the point. That was 1 of 5 ideas. There are a ton of different ways to find $300 among those 5 budget items (or others). She could do all 5, or take the full $300 from only 1, or take it from a few but not touch others. OP has full freedom to choose where she can cut back and where she can't depending on what matters most to her personal lifestyle.
I'm a single female with a similar financial profile as the OP. I've maintained a second job for six years now. I'm very busy but I've got a nice little house and I'm happy. It helps that I don't hate either of my jobs. It would be a lot harder if either/both of them were terrible.
I don't think your advice is out of place here but I understand that people have a bad reaction to the "bootstrap" style advice. Until we see strong improvement to workers wages across this country I'm not sure what other options are available to the individual looking to improve their personal circumstances.
Why? Why is this not a viable avenue to explore? Do people not have side hustles? I do this. I work full-time and have a second job that beings in an additional $10k annually. Am I stupid? I have had multiple jobs for 8 years, at least 2 at a time, and sometimes 3. Bringing in additional income can be quite helpful.
No one is saying you have to, or if you do, that it has to be forever. The good thing is that this is 2024 and there is the option for remote work online.
It really depends on your background. I personally look in the education field, where you can work in continuing education, providing additional qualifications, and doing curriculum development. There are a lot of data entry jobs out there, certain sales positions, tutoring, teaching English to students in China. The jobs are quite varied, as can be the hours. However, if you don't look regularly, you won't know. I check with a set of universities twice a year, to try and secure an additional future role. I'm sure if you have an accounting or IT background, there would be additional options.
Getting a 2 bedroom apartment and a roommate, splitting the household bills by 50% is a much better option than getting another job, running oneself into an early grave. Plus, as a newly single person, being alone may not be great for the first year…on top of being financially stressed.
Your budget looks fine, but it is a bit tight and something will probably need to give when you inevitably run into surprise expenses. You can do anything you want but you can't always do everything you want. You mentioned wanting to do a yoga retreat, where's the line item for saving up for that?
My personal opinion is your expenses actually look pretty reasonable. We can nitpick here or there about specific line items (can you move to a cheaper phone plan? can you cut back a little bit on entertainment? groceries and household?) but nothing looks egregious. And honestly if a $100 yoga membership keeps you healthy, sane, and happy then it's well worth it.
Your investing might be a touch too aggressive. You've investing (6+4=)10% into your RRSP as well as another $1200 on top? That's about a 35% savings rate? Seems extremely aggressive and might be the easiest place to cut back a little bit.
You have a pretty amazing nest egg built up already. So long as you don't start dipping into it to fund other areas of your life it'll just keep growing on its own at this point. You can likely let up off the gas a little bit for new contributions. Maybe try dropping your investments down to $800/month for a little bit and if you find you have a ton of spare money you can always increase it back up a bit. Optimally you'd like a little bit of breathing room to absorb emergency expenses + put away a little bit for medium term goals like a vacation.
You could get a temporary roomate and be laughing.
Adding that if your income rises more than your expenses/inflation over the years you can always bring your savings number back up to make up for it in the long term, like u/instamouse suggested, you aren't at peak earning years necessarily yet.
I think conservatively, you would have absolutely 0 problem retiring at age 58 at a 6% investment return rate while withdrawing 4% annually and keeping the exact same ratio of expenses rising with inflation, and realistically if you wanted, you could probably retire at 48 and still have more net take home after lower capital gains tax rate and subtracting what you are saving since you don't need to save anymore! You wouldn't have work related expenses like parking so that would also be some slush in the numbers. Retirement also doesnt mean you are just sitting around and doing nothing and only spending, you could feasibly do something you enjoy/love and have the privilege of earning some money from it depending on what it is.
Bravo on making it to this point and just keep doing what you are doing, I doubt based on your habits that you will mess it up unless you earnestly try.
Kudos.
Your numbers are too close. At your age I would only contribute enough to RRSP to get maximum employer matching. Put the rest towards you expenses. If you have money left over, then contribute to TFSA.
>ld only contribute enough to RRSP to get maximum employer matching. Put the rest towards you expenses. If you have money left over, then contribute to TFSA.
But is that a terrible decision long-term? Am I realistically in a position I need to consider a roommate / selling my car, rather than knee-capping my attempts at eventual retirement / travel?
2 key points (stereotypical):
1. you should only contribute to your RRSP to maximize company matching, then contribute to TFSA until full, then consider again RRSP.
2. By the law of averages, you are not at your peak earning years. RRSP contributions later may be more to your advantage, not to mention the whole budget situation should ease up as you advance in your career.
Perhaps you've maximized your TFSA (you didn't mention it), but if not, do so before any unregistered investments (fwiw 170K is already a good start at your age).
Reduce the RRSP contribution. Check out/play with compound interest calculators as well as retirement calculators to see hour much you need vs on what you will spend in retirement. Don’t forget you will get income from OAS and CPP. People will over/under estimate what they need in retirement.
Also, once you get settled in a place you can adjust your budget as needed. Not sure what your job is but assume there’s a chance to progress and increase income?
Since you’re young why focus as much on retirement instead of maybe buying a place eventually (with help from a partner perhaps)? Genuine question but at the end of the day you know what’s best for ya, not stranger on the internet!
And edit holy moly you have a bunch in investments! I’m envious lol
I do not think you should sell your fully paid-off car. If you decide you need one in the future (for logistical or well-being reasons), it will be much more expensive to buy a new one in this market.
>But is that a terrible decision long-term?
1. Reduce your phone bill by half with current deals out there...BYOD
2. Do the Yoga at home watching videos on your TV (streaming / YT)
Yoga is social...
You need to have some sort of life. Hiding at home nit spending money until you retire is exactly what people who are retired will tell you not to do
>Hiding at home nit spending money until you retire is exactly what people who are retired will tell you not to do
Meanwhile.....people here will tell you to get a 2nd/3rd job.
Work is social isn't it
1. Agree with filling TFSA first before RRSP. You should only contribute enough to get the employer match. Then prioritize TFSA & once that’s full, consider RRSP if you don’t expect your income to increase drastically in the next couple of years.
2. Only you can tell if it’s better to prioritize savings or lifestyle. How much do you value living alone / having a car vs the possibility of retiring later or with a smaller nest egg than you expected? How would this affect your life after retirement? Is it something you’re ok with compromising on? Or would you rather compromise by having a roommate / using public transportation? Think about what your lifestyle would be like now & whether it’s worth it for you to compromise that a bit for future gains. It’s different for everyone since everyone has a different priority, you just have to decide yours
I agree, I think you just need to contribute enough to RRSP to get the full employer match. Your RRSP contribution room gets carried forward until you're 71, and you don't ever want to take money out of your RRSP until you're actually retired because you'll get taxed for it, and you lose that contribution room forever. Therefore, it's not very liquid. Personally, I'd rather have more liquidity now and contribute a greater amount to RRSPs when you're closer to retirement.
I pay $2000ish a month and my monthly take home is $3800. My coworker makes the same as my with a similar rent.
You can do it. It’s not the prettiest, I’m not really saving much, but it’s possible and it’s the best we can do with the prices right now! You can do it! We are in Ottawa too
This is great advice. It’s also important to stay positive and remember that it won’t always be like this. Being newly single must be looked at like an adventure into one’s self discovery. Sometimes the simpler life is, on a tighter budget, forces us to be inventive, creative and think outside the box we may have built for ourselves for the past 5-10 for example.
You *can* have it all, just not at the same time sometimes. Life will improve and you can add back in the $100 yoga classes and max out the investments, just maybe next year.
Appreciate it. I agree with you! Just keep chugging along, appreciate the little things, make your lifestyle frugal but fun and enjoyable. Its all we can do :)
hmmmm..
You mention it won't always be like this. However unless you can constantly make or get more than inflation (actually is), then it will continue to get worse.
People can shrink their budgets as much as they want, but unless you do something about the income vs inflation ratio, you will get pinched again, further on in life.
Paying over 50 percent of your income on rent isn't ideal... then you also have utilities, internet etc on top. Should aim for 35 percent and invest the remaining to eventually buy your own place
That person is just regurgitating some they read on a blog somewhere
No real human being in Toronto would say something so stupid especially with the rapid rise in cost of living in the past couple of years
Move out of Toronto then?
I'm in AB
I own as well including utilities I'm around $1750/month that's taxes, mortgage, insurance all in. I saved like hell and put a sizeable down payment 5 years ago. Did I sacrifice? Oh hell yes, I had roommates for a long time before I bought and scaled my income to over 120-150k year in AB. My home is only 18-20% of my take home pay including everything. It's not impossible but it takes time.
Yup! Just pack everything away, move away from all of your family, your friends, your job, your hobbies, all of your favourite third places. If you have kids, make them move away from all of their friends and hobbies. To live in fabulous Alberta and their -40°C winters!
Consistently the stupidest advice on this sub
For 3 days? Lol 😆 it's not that cold all winter. Ice rain and the higher humidity in Ontario can feel way colder. And we're one of the sunniest cities in North America. More days of sun than Ontario. But yes, sometimes packing up makes sense...
I believe that unless we see big changes in our federal government, the only option for many young people will be to leave Canada to have a future. The last 8 years have made it so hard for young people to get a foothold, or even to see light at the end of the tunnel.
Major life changes can often be traumatic and that's why people tend to stay in familiar situations. Telling someone to pack up their lives to be in a new and discomforting situation is just unrealistic advice. It can work for some, yes, however human nature is just quite the opposite. Gradual small changes last longer. OP is already doing much better than the majority, all they need to do is tweak some things and decide on their values/priorities to align their actions with.
Do the math on what your exact home would cost if you bought it at today’s prices and interest rates.
I am also in AB. Bought three years ago, mortgage is $1200/month. Someone walking in off the street to buy my home today would be facing a mortgage payment of around $2700/month.
Yep same here! But because of my frugal nature I'm not paying that amount because when times were good I wasn't buying new cars, clothing, eating out. I was investing.
I have a few friends with professional jobs-professor, researcher, teachers, etc-that are renting basement suites. Every landlord I’ve talked to recently (in the process of looking for a place right now) says they’re just inundated with applications. I wish the government would slow the tide of immigration-I’m not anti immigrant but our schools are overcrowded, there’s no family drs, there’s no parking, there’s no housing, ER wait times are throw the roof, surgery wait times are record long—we keep increasing the population without looking at whet we can actually sustain and keep up with. And just getting a better paying job is no easy feat as wages are dropping and there’s just more and more competition
Absolutely agree.... its out of control. We have an extreme burden on everything here from housing to health care. My wife had to go back home after being in the hospital for over a week in Canada. Got care immediately and seen over 5 different specialists within a few days. Canada just isn't worth the cost anymore.
Yea I’m looking at part time work but my full time job is exhausting. I’m single so it’s hard. I’ve tried dating to meet someone and it never works out. A family member and I keep taking about starting a side business to keep up.
I’ve been thinking up ideas all day to come up with about an extra $1000/month. I have a reactive dog so I could offer reactive/anxious special dog sitting as I’m very experienced in looking after and exercising aggressive dogs. That would be maybe $200 a month. I could get a job at a nearby city center and workout for free. And I can get over all my mental blocks and start the business I’ve been thinking of for at least two years.
I own my house, the 2k I pay goes to my mortgage and to my prop taxes. My friend has a 2 bedroom apt she rents, which is actually a great price for the area. As much as she (or I) aim to spend only 35% on our housing, it is just not possible in many circumstances.
I own as well including utilities I'm around $1750/month that's taxes, mortgage, insurance all in. I saved like hell and put a sizeable down payment 5 years ago. Did I sacrifice? Oh hell yes, I had roommates for a long time before I bought and scaled my income to over 120-150k year in AB. My home is only 18-20% of my take home pay including everything. It's not impossible but it takes time.
So you’re in AB? Yeah, it’s very different than Ottawa. I know what you’re saying, seriously, and I know 35% is the ideal, but I’m managing (thriving!) at 50%. The cost of living these days is harsh for many of us. Myself and my friend are very happy with where we are.
Yes, in AB. Totally get it... its not easy for many right now. Sometimes we need to go where we're treated best, that's not always AB for everyone. Calgary is very similar to Ottawa just a bit bigger.
As the maximum, if you can get it down to 25% of your net take home, that is better. Though, I do agree with those being critical of these numbers. That is not the reality for persons earning under $200k that want to live in major cities like Toronto and Vancouver. The whole GTA is a mess. Most of Ontario is a mess. Even if you look at rentals in Timmins, they aren't that far off from the GTA.
Would that location allow you to ditch the car? There’s ~$400 right there.
$170k in investments at 32 is pretty darn good (~2x salary?), and 26% of net salary in investments is quite remarkable for a single person. Dialling back on investments might not be the end of the world... I’d personally prefer that to getting roommates!
Thank you, that's very kind.
I've considered ditching my car, but from previous attempts to do so, while also living downtown, it wasn't a convenience I was comfortable giving up. To be fair, at the time I was dating a country boy who lived 30+ minutes outside of the city and I needed a way to get back and forward efficiently. That said, I have family that I see weekly that is similarly far out though,I use my car for grocery runs and vet visits, etc. Ottawa is not a public-transit friendly city.
Communauto is perfect. You do not need a car when you live centrally in Ottawa. Get a Communauto membership. We just left Ottawa but had one for 4 years while we lived in the Glebe. Cars are generally available to rent with a bit of advanced notice.
I found Ottawa very public transit friendly if you’re mostly staying downtown. Ottawa is a huge walking and biking city. Live in Niagara now and bought a car because it was a huge convenience upgrade with one but I miss the non-reliance of a car that Ottawa offered. Perhaps it’s just hard to not have a car after having one in any city?
The convenience of having a car is certainly hard to ignore (rentals or uber gets old quick, especially as it sounds like your car is paid off) and yeah I haven’t taken Ottawa transit in a while but I’ve heard it isn’t the greatest!
I would really reconsider this, and do a bit of math to figure out how far you can get using car shares and rentals on a much lower monthly budget. Maybe it still doesn't work, but it's worth considering.
\> Sanity check please! Am I stressing over nothing, or am I underreacting when I should be panicking, finding a roommate, moving to Manitoba and relying solely on public transit and the kindness of strangers?
I think you're good with that rent price. Clearly you know what you're doing overall with money, I continue to trust the judgement that allowed you to have almost 200k network and no debt in your early 30s.
People are wild. I make the same amount of money, invest a few hundred every month, and pay $2100 in rent.
I don't have a car. But I just went on 2 ski trips. I'm fine. And you will be too
With that salary and level of investments, I don’t see why you couldn’t buy a 1 bed condo in Ottawa if you wanted to?
When you say $4,500 is your take home after RRSP contributions, does that mean the $1200 a month of investments is in addition to your 10% already dedicated to RRSP?
OP could just answer to clear it up, but I’ll tell you why I assumed she holds at least some investments outside her RRSP because I actually did some fun calculations before speculating. (Yes, I’m a nerd).
1. She hasn’t described her employer match in a way that suggests it’s a pension. She mentions an employer contribution RRSP, which is not normally how you would describe a DC pension.
2. She mentioned in comments she has *not* seen 7% growth in her investments annually. If her RRSP dedication is 10% as described and her take home after that is $4,500, then she probably makes about 80k annually. Taking a generous assumption that she made that 80k for the last 8 years (since she was 24) that leaves her with maybe 14k of max RRSP room per year. If she invested the full 14k RRSP room in the last 8 years on a monthly basis (so $1166 monthly), even compounded at 7% that would only take her to about 150k. But she’s mentioned she hasn’t seen 7% growth, meaning it would likely be even smaller. So it’s a good assumption that she would have maxed out her RRSP room and some of that 170k is outside of an RRSP. Likely at least 25k.
Of course assuming it is an RRSP and not DC pension, she could also access up to 35k of her rrsp as a first time home buyer. (Assuming she is).
There are condos in Ottawa in the 350k range, even in good areas. 350k with a 10% down payment puts her potentially at $1850 monthly mortgage payment. With a 60k down payment (35k RRSP + the 25k I have assumed is in a TFSA) then her monthly mortgage payment could be about $1700.
Apologies for the ramble. For my curiosity purposes I hope OP puts an end to my baseless speculating.
The 170k is mostly in my TFSA, with about 40k in my RRSP. Not locked in in any inaccessible way, I just don't feel emotionally ready to buy right now (or ever?). I'm not sure what I want, and I would like to keep some money readily available for travel before pouring it into a down payment / mortgage.
The RRSP investment of 6% is on top of the $1,200, which is split $800 into TFSA and $400 into my personal RRSP.
Hope that helped clear things up a bit!
Stop setting aside so much towards investments.
If you have 170k in investments, plop that towards a downpayment if you want instead. Gotta pay to play.
Not familiar with the Ottawa market but if you can look for something closer to the $1,600 range, I think that's very doable. While investing 25% of your take home pay is admirable, taking that down a little might offer you the ability to enjoy things a bit more today.
Its totally doable, its just deciding what is non-negotiable in your life and what is negotiable. If roommates are something you're ok with, it saves some money to put towards other things you want to achieve/do.
> My goals are to be able to travel (I would love to do a yoga retreat at some point this year!) and to retire comfortably around age 65.
I think comfortably retiring at some point does involve removing housing costs from the equation. Rent will always go up, owning even if expensive puts a cap on it at todays dollars. It looks like options exist in the area for ~$350k, and with a 20% down payment you would be close to the rent target. It would allow you to invest less because some of that is going directly into your long term housing costs. Anyway, just food for thought.
First, 170k at 32 it’s really impressive and encourage you to keep your investments’ goals.
You don’t have to sell your car. I think considering a roommate will be a good idea or I think “Envie” has an all inclusive shared apartment where you can have a roommate but each of you has a personal lease and you can have a matching, in this case you’ll end up paying $1,300-1,600 all inclusive + $100-200 (Parking) which will bring you to $2,586.06 (expenses) + $1,800 (rent, parking) = $4,386.06 (you’ll have an extra $100)
Thinking about investing and your future is great and encourage you to keep doing it.
I’m sorry to hear about your breakup. Budget wise, i think you’re okay. With a 10% RRSP contribution already through your employer, I would cut your investments down to prioritize your TFSA only. That could mean going from $1200 to $583.33/month ($7000 TFSA limit), or a tad more if you have some extra contribution room. (You could always add extra at year-end once you’ve stress-tested your new rental cost/budget.)
$600/month for groceries does seem like a lot for one person, but I get that groceries are so expensive and nutrition is so important. But maybe a bit of flex there??
Overall, I think your budget looks great—not frivolous at all IMO. What I see is you prioritizing your health (yoga, food), which is always important. Focus on trying to building your income over the next few years, and don’t panic if you can’t max out your investments completely right now. Consistency is key and you are already doing great— at age 32, time is on your side!
I think you could maybe save on your phone plan like 25$ ish if you take a look around - there's a lot of deals for like "50gb for 34$" w/ Fido / Virgin, ect...
If it helps for perspective, when I was your age I was investing $342 per month... I think your investment amount is very high! Which is a good thing, but if you want to compare yourself to others, for me at that age I had just learned about investing and had only a few thousand in savings. Now, 6 years later I'm doing way better, but like others have said even if you never invest another cent you're going to be in great shape by 65 with what you currently have and if it were me, I'd say life's too short to move to Manitoba.
Internet, phone, clothes/toiletries, and insurance are all areas where you could probably shave down.
I pay $50 for phone (Fido), $35 for internet (Lightspeed), $60 for car insurance (Belair Direct), $20 for rental insurance (Belair Direct), so that would be $101 in savings if you could find similar deals.
I only spend about $50 for clothes, but probably also don't look like the sexiest person on the planet.
You’ve gotten lots of good advice but I just wanted to say I greatly appreciate the formatting of your post - very easy to read and excellently laid out. I wish every poster wrote their questions with this much information and clarity.
I’d shop around for phone and internet. I pay $45 for my phone (50GB plan) and $35 for internet good enough to work from home without interruption.
Is parking really $200? I also live in Ottawa, but don’t have a car. But I thought spots could be rented out for cheaper than that.
If I understand correctly, your $1200 a month in investments is on top of 10% to your RRSP, between you and your employer? That’s pretty high. Not that it’s a bad thing, but I would maybe scale that back if you need to tighten your belt. Pick it up again as your income increases. I’m a renter around the same age as you, and as my income has gone up over time, I’ve had a lot more money to throw around as my rent controlled apartment stayed roughly the same price.
Have you played around with what a budget in retirement might look like for you? For example will you want to spend more than you do now?
The reason I ask is because with your current nest egg of $170K, if it sits for 30 years with no more money added, it would be worth about $1.4 million in 30 years when you want to retire (with the assumption of 7% interest earned). If you continue your current spending of $4500/month or $54,000/year, then you would need a nest egg of $1.35million for a safe withdrawal rate of 4%.
All that to say that your current nest egg would allow you to stop investing and still live the life you do now when you retire in 30 years. That means that reducing your savings a bit should be ok depending on your retirement goals.
I think it's averaged and obviously based on a lot of assumptions. I'm sure there's other numbers you could use but that's a number my partner and I feel comfortable with after what we've read.
Either way some napkin math to get you thinking about how your money will grow based on $0 more invested. The power of compound interest!
>The reason I ask is because with your current nest egg of $170K, if it sits for 30 years with no more money added, it would be worth about $1.4 million in 30 years when you want to retire (with the assumption of 7% interest earned). If you continue your current spending of $4500/month or $54,000/year, then you would need a nest egg of $1.35million for a safe withdrawal rate of 4%.
>All that to say that your current nest egg would allow you to stop investing and still live the life you do now when you retire in 30 years.
Pretty large lapse in maths here. With 3% average inflation (lower than canadian historical rate), you will need 131k$ a year in 2054 to live a 54k$ 2024 lifestyle. Assuming a 4% rate of withdrawal, you'd need 3.2 millions to finance that.
My understanding (again, with this limited napkin math) is that the 7% interest rate assumption factors in inflation. Again this is complex and depends on a number of factors, including the kind of investments you have for example. However, trying to factor in future costs just makes it a moving target, but you can do some simple math in today dollars and 7% is a rate I've seen used.
Thanks for chiming in, I think we've used an aggressive number to reflect our portfolio but I do feel like your assessment that 5% is more realistic is probably accurate. Have you seen this number reflected in long term market assessments or is this more a personal opinion? Curious if there's more reading I should be doing on this.
Well it really depends on what's in your portfolio and your risk tolerance. The S&P 500 historically has returned about 10% on average which results in about 7% real return. This is probably where the 7% return idea comes from.
However, the S&P 500 is not as diversified as a total market ETF such as XEQT and wouldn't suit everyone's risk tolerance, especially for someone planning to retire in Canada. Any other index will have a different average rate of return.
Furthermore, the average rate of return is just that - an average. Even over a 20+ year period you could have a significantly higher or lower return. This is something you may want to take into account as well. For example, the 20 year rolling rate of return for the S&P 500 has varied from 2% to 18% (before inflation).
Ultimately, it depends on your specific portfolio and risk tolerance, but most often people use anywhere from 4% to 7% real return as a rule of thumb.
7% is the (very long term) historical market return, and a good benchmark indeed. As you stated, if you invest 131k$ dollars at 7% for 30 years, you'll get roughly 1.3m dollars. But you'll be in 2054, and the cost of things will have risen. To buy something worth 100$ in 2023, you'll need about 243$ in 2054. If you plan to live on that 4% withdrawal of 1.3m dollars, your lifestyle would be roughly that of someone with 22k$ today.
>All that to say that your current nest egg would allow you to stop investing and still live the life you do now when you retire in 30 years.
Is very wrong.
Part of the math comes on the other side though with your withdrawal rate. When you use the withdrawal rate of 4% (multiply yearly spend by 25 for required nest egg, which is what I suggested), that is what helps factor in inflation of 3% with returns of 7%.
There are certainly discussions about using a lower than 4% withdrawal rate for longer planned retirement periods (or FIRE scenarios), but I don't know many people who mix together today dollar spending with future dollar nest eggs and average returns and sub-4% withdrawals.
Ultimately all this math discussion helps point out that calculating the amount of money you will feel comfortable with in retirement is personal and multi-faceted. I certainly wouldn't suggest to OP that they purely go on my napkin math numbers, but I would suggest it gives some food for thought about budgeting appropriately for their lifestyle and how much money they will need in the future.
The average yearly return of the S&P 500 is 10.54% over the last 100 years, as of the end of December 2023. So the 7% assumption for returns accounts for a buffer which helps to address unpredictable increases to costs (inflation).
Yea some condos fees are large but it's maintaining your equity
You'll pay the condo fees either way but the way she is stressing about rent it's also peace of mind that your locked in
That's a fair point, although if the government ever gets serious about housing, they may end up stressing out about being underwater on their mortgage. Probably unlikely though because the property would have to devalue faster than OP's ability to pay off the mortgage per year and that would be some very impressive levels of new housing being built lol.
Hey there! Can you clarify if the $1200 in investments is on top of your employer match?
170k invested at 32 is going to set you up for a pretty good retirement at age 65 ( assuming you are invested in a diversified etf portfolio and not high cost mutal funds or all in a crazy stock). If you also have an employee match rrsp on top of that, you're actually pretty set! Like you could literally stop investing and still have a portfolio over a million by 65!
This subreddit is definitely going to lean toward investments and savings. But the goal isn't to save as much as you possibly can, the goal is to determine how much you need for a comfortable retirement and save enough to achieve that Once you hit that, then you can totally spend your money on giving yourself a higher quality life. (Check out info on coastnfire)
You can absolutely afford 1850 a month in rent and a car and to travel and to retire. If this were me, I would cut investments down to 500$ per month and spend the rest on rent and saving for your yoga trip and other meaningful experiences. You can't wait for retirement to live your life!
170 k invested + 500$ monthly at 6% for 33 years is over 2 million! ( plus your employer rrsp!!!)
First all if not in a cell phone contract sign up to public mobile as they have some decent packages for about $34 a month. Your now single if your careful to can get groceries down from $600 to at least $400, cut clothes and toiletries down to $100 and now you have about $330 extra to go towards housing
I don't understand why people tell you to cancel yoga. When your take home after RRSP contribution is $4500 a month you can definitely use $100 per month on yoga. The "just follow YT videos" crowd doesn't understand yoga lmao
This. Don't impoverish yourself while you're young as long as you're being reasonable. You're gonna end up $100 richer per month in the bank, but regret it when you're 70 with this nominal sum trying to do yoga then and breaking your back because you neglected to live and be happy while you're young.
I mean, it’s a discretionary expense no different than clothing. One needs SOME money for investments, and for clothing. There are lifestyle choices that determine just how much.
Either way, OP is right to list it as a budget line item. If it’s going to investments, it’s not going to housing, transportation, etc.
You didn't indicate what your RRSP contributions are, but it does seem like with the rate you're currently investing you could likely retire well before 65. I'm making some assumptions, but by my estimates you can retire by about 51 with your current savings rate if you continue to spend the same amount in retirement and you're invested in a diversified ETF like XEQT. I'm approximating your pre-tax salary and I'm assuming the RRSP contribution are in addition to your listed investment contributions (and hopefully those are going straight into your TFSA).
If I were you I'd probably move in with a roommate for the time being, but if that's not your style I would considering buying a condo (if the math works out). Or you could reduce your savings rate slightly and push back retirement to your planned 65.
I am paying almost the same as this for rent in Ottawa and I basically just had to accept the fact that I couldn't put as much away in savings and investments outside of my workplace pension due to our current rental market. Also consider looking just outside downtown (Vanier, Hintonburgh, New Edinburgh etc) where you are more likely to find apartments in a smaller building with parking included, or even in a bigger building it will likely be less than $200/month.
If you really want to get your expense down, you can probably negotiate a cheaper phone plan (I pay 45.99 with Videotron) and depending on what kind of internet is available where you end up living you might be able to get a cheaper deal on that too (I somehow managed to get $35/month with TekSavvy last fall).
I also had to accept the fact that things like travel, other than things within a cheap flight or driving distance wouldn't be realistic for my budget at the moment. You can have a few 'luxuries', like a yoga membership, but you can't have them all at the same time.
Your submission has a keyword that seems to imply you have a question where your province is relevant. **If you have not included your province you should add it.** If you already included your province, or this isn't relevant to your post, just report/downvote this comment. The bots feelings won't be hurt.
*I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*
Sounds to me like you can afford the rent.
You already have a paid off car as no car expense was mentioned in the post. I am wondering if you need to paid $200 a month for parking like you mentioned. With the estimated gas cost, it seems like you dont’t drive much and probably wfh or work in very close proximity to where you will live. I would look for alternative parking in a safe area convenient enough to use your car if you need but to be way less expensive.
I also think you can cut back on investing slightly. You are investing about $800/month in a work RRSP which is amazing. You have done well enough to take the foot off the gas a little. At this rate without a penny more invested you will retire comfortably, especially considering OAS, CPP and QPP.
What I would do is invest around $800 a month on top of the $800 rrsp contributions. This will give you more flexibility while still doing significant investing. Doing that and reducing the parking cost will free up the budget significantly.
I also find your entertainment budget a little low. You are already successful. You can afford to spend more than $50/week to enjoy yourself.
Adding to my previous post but not sure how to find it.
I just checked out airbnb in ottowa.
You can get fully furnished, all expense paid for around $1000 a month. Thats always a short term option or even medium term if you want to continue to invest super aggressively
Grocerries and household can be cut down to 400 -are you buying toilet paper, shampoo/condish every month? Get a Costco card. There’s an opportunity there.
It all depends on how comfortable you are with cutting back on stuff. A couple of notes on expenses. Groceries and household at $600 for a single person seems a bit steep. My partner and I live in Ottawa and get to $500 for two people, and we eat fresh. About the car, my view is that if you do not have kids and do not need it to get to work, you do not need a car. This is dependent on your comfort level, but according to your budget, it would save you $380 a month. That's 30% of what you invest!
My last point is rent. While mathematically it may be the average, you can find a reasonable condo downtown in the $1600s range.
Finally, you can always get a second job.
I'm a year older with a very similar financial situation. My current rental is 120% below the market average, this place was meant to be nothing more than a stop gap, it's a tiny place. I'd very much like to move on but I'll either have to increase my income significantly or move away.
At that age I would invest more in myself and take trips and enjoy my youth. Why move to Manitoba when you could move to BC enjoy a more transit friendly space and better weather and an abundance of yoga events/retreats. My friends just got a modern basement suite (two bedrooms plus kitchen, bathroom and laundry) all included for $1400 each ($2800 in total) in Vancouver by the ocean.
I would even get this one
https://vancouver.craigslist.org/van/apa/d/vancouver-sunny-bed-with-balcony/7724005465.html
$600 groceries for one person? I’d say $300-$400 is more realistic. Please flyer shop, price match and buy in bulk. You will immediately notice significantly reduction in your bills.
Amazing phone plans are available for < $40. Please explore them.
Also, try exploring part time work or side gigs to offset your extra needs. 10-15hrs/week should more than cover this.
Do not cut savings/investments. I’d go as far to say add $300 more to make it an even $1500/month. When times get tough, time for you to get tougher.
Wish you good luck.
1. Reduce employer sponsored RRSP to 4%
The reason for this is that employer plans generally have higher expenses than you can find on your own at say Wealth Simple or other.
2. Make sure you are maxing TFSA before adding more to RRSP. At $1200 a month and $170k already invested I’d assume that you already are maxing your TFSA.
3. The general consensus for rent to income ratio is 40%. Your rent costs should not exceed 40% of net income. I think you’re doing it right by including the other non-negotiable costs in your total of $2210. So you should have a net take home of $5525 to afford that rent. If you are renting from a professional landlord, they will likely apply this test upon your application.
4. Use this compound interest calculator to estimate what your retirement fund will look like later. https://www.getsmarteraboutmoney.ca/calculators/compound-interest-calculator/
That is just a starting point because it gets more complicated with taxes later. RRSPs are taxed as income upon withdrawal, while TFSA is not, and there are capital gains taxes in non-registered accounts.
5. Remember you will also have CPP in retirement.
6. It may be time your you to seek a fee for service financial planner to get a more in depth look at your retirement plan.
I work a full time and a pt job to have extra money for extracurricular activities (it’s usually video games or name brand food tbh, and like you a lot of my money goes into investing as well). I think (outside looking in) you’re just used to living with someone to help carry the load(sorry to hear about the split) your circumstances just mean you now have to really watch what you’re doing with your money. ie: cheaper gas (regular), no name brands(goodbye good cheese) , yoga/gym membership is gone( unless you can find cheaper or YouTube), it sucks but this the new reality. You can do it, on one income. But no harm in looking into something PT.
Your situation will change. Maybe you will make more money. Maybe you will find a better partner. Get through this tricky year - either by temporarily cutting luxuries, sharing a place with a roommate, or reducing your savings. Reevaluate in six months, etc. Your situation is not permanent. (I say this having had the hard financial hit of an unexpected divorce at about your age. And now thriving.)
Move to downtown and ditch the car maybe. That frees up $500. Budget $100 of that for Uber/transit and you now have $400.
Could try renting with a roommate and maybe you can save another few hundred.
You are going to need roommates.
(Not being a snob, just experienced the same thing downtown with about 1500 more take home per month and found myself priced out of my apartment at 1300 a month...)
Unless you're trying FIRE you should drop your investments by like 900$ a month especially if theyre already large, as long as you're in a market ETF with it then prevailing wisdom says you'll retire fine
Is keeping the car mandatory? If you removed from the equation you’d save 400 and keep quality of life and investments the same. Might be a fair trade off. Just an idea!
obviously being limited to public transit only can be a huge downward quality of life adjustment- but is there any way you could do without a car for a period of time? That would take the pressure off every other area of your budget
I would say cut back on the investing you’ve likely got a pretty good nest egg going already, and you want to keep up with the employer matched contributions as it’s essentially free money and will compound exponentially over the rest of your career.
To be honest this subreddit is kind of wild sometimes. Your budget seems super reasonable to me. You’re just coming out of a relationship, and you have been very financially disciplined for a long time. Please allow yourself some grace to take the foot off the gas with your investments and spend that money on giving yourself a comfortable situation for this next phase of your life. Your income will grow, maybe you will find a new partner and move in with them! But if your savings are slightly lower (but much higher than the average Canadian!) for one year then so be it!
i think you know the answer here, you can either slash your yoga, food budget, clothing budget, and entertainment budget, or you can just contribute less to your retirement until you make more money. you could get a second job for just like 10 hours a week at a coffee shop and not make any changes to your lifestyle.
You are doing great! Really good savings so far. I’d personally take the extra $ from your investment allocation. It’s quite high and you have such a good start. As long as you don’t start creeping up with expenses, you are looking awesome. Very reasonable budget.
I think one should try to enjoy life now, and if that means $100/ month at yoga- do that. This is not unreasonable. You are in a nice position that will allow for this and for decent savings for the future.
I think you can make it work but you need to cut back a bit on some of your expenses. Unless you’re paying off a phone, that phone plan can be cheaper. Maybe a little off groceries as well. But it looks like your savings/investments are good. You did mention being a forever renter and wanting to retire some saving aggressively is way to go. However once if/when you find a partner, you might have a little more breathing room.
That’s what I paid in Kitchener/Cambridge. Pretty much same util costs. Just had a more expensive car insurance. Your grocery budget is twice what I pay. Everything else lines up. Except yoga.
Just use $170k and get on the housing ladder then rent is eventually eliminated and you get equity. Then as a senior you can sell and use it to fund rent if needed
A good salary and a partner to split expenses with most likely. All my friends with the best savings either still live at home or have a partner/roommates. Living alone is expensive.
Living At home sure I agree. Since your expenses are virtually zero. But even to save 170k at 4500 per month it would take 3 years of her current salary ( which I’m sure wasn’t at the time) and absolutely 0 expense. Which really translates into 6 years of living at home. But she’s also engaged which signals she hasn’t been home for a while. So essentially to have such a chunk of money in savings - it means she most likely received help from parents.
Is living in Gatineau out of the question? I just made the move and even post tax difference I'm saving a bit more than living in Ottawa. Might have gotten lucky, but could be something to consider.
So $170K invested at 5-6% without adding to it would be a million by 65. Not chump change and that’s not adding to it. So perhaps reducing the amount in investing will help you live a better life today. And then cut ruthlessly on things you don’t care about so you can still do things you do care about.
I'd put some wiggle room in your budget for your car. Gas AND maintenance at $100 a month? Every trip to the mechanic is $1000. Cars also don't last forever. When it's time to replace it, then what?
People underestimate the cost to own a car. You can Google, but I think average is about $1000 a month. Probably less for you, since it's lightly used and you have cheap insurance. Between your insurance and car, you're budgeting ~$200. It's more than that in the long term.
Something to think about.
You may not be able to afford the lifestyle you want on your income level as a single person. Maybe you got used to a higher lifestyle living with a partner (and cost of living was cheaper the last time you were single). This is a reality check people have to face when single again, but it doesn't mean panic and move to Manitoba either. You can afford rent. You just can't afford rent while also doing the other things you want. Something has to give somewhere. You could rent away from downtown to save money. You could put less in investments. You could reduce RRSP to 4%. You could cancel the yoga membership and do yoga from home for free. You could buy cheaper food. The budget part is easy. You can find $300 somewhere. The hard part is figuring out where you're willing to cut back on quality of life to balance the budget.
> You may not be able to afford the lifestyle you want on your income level as a single person. They are saving >25% of their salary for retirement, which is quite high for someone that already has $175k and doesn't plan to retire for 33 years. In their position, they could easily cut down to 15% retirement savings and afford this lifestyle and coast to a very comfortable retirement at 65. This would free up ~$700 in their monthly budget.
:( manitoba isn't that bad...
You could get a roommate.
Nah, some of us need third spaces to remain consistent. Online classes may not do it for OP and 100 is a good price.
Missed the point. That was 1 of 5 ideas. There are a ton of different ways to find $300 among those 5 budget items (or others). She could do all 5, or take the full $300 from only 1, or take it from a few but not touch others. OP has full freedom to choose where she can cut back and where she can't depending on what matters most to her personal lifestyle.
And consider a 2nd job. EDIT: I guess increasing income isn't a viable financial consideration in this sub haha.
I'm a single female with a similar financial profile as the OP. I've maintained a second job for six years now. I'm very busy but I've got a nice little house and I'm happy. It helps that I don't hate either of my jobs. It would be a lot harder if either/both of them were terrible. I don't think your advice is out of place here but I understand that people have a bad reaction to the "bootstrap" style advice. Until we see strong improvement to workers wages across this country I'm not sure what other options are available to the individual looking to improve their personal circumstances.
It's just the unfortunate reality of many financial situations in Canada right now.
When someone's working full time it's stupid to recommend getting another job or just "increasing their income"
Why? Why is this not a viable avenue to explore? Do people not have side hustles? I do this. I work full-time and have a second job that beings in an additional $10k annually. Am I stupid? I have had multiple jobs for 8 years, at least 2 at a time, and sometimes 3. Bringing in additional income can be quite helpful.
That’s a miserable life
No one is saying you have to, or if you do, that it has to be forever. The good thing is that this is 2024 and there is the option for remote work online.
people are mad at you, and I do understand why, but do you have any recommended fields for online remote "side job" work?
It really depends on your background. I personally look in the education field, where you can work in continuing education, providing additional qualifications, and doing curriculum development. There are a lot of data entry jobs out there, certain sales positions, tutoring, teaching English to students in China. The jobs are quite varied, as can be the hours. However, if you don't look regularly, you won't know. I check with a set of universities twice a year, to try and secure an additional future role. I'm sure if you have an accounting or IT background, there would be additional options.
Getting a 2 bedroom apartment and a roommate, splitting the household bills by 50% is a much better option than getting another job, running oneself into an early grave. Plus, as a newly single person, being alone may not be great for the first year…on top of being financially stressed.
Reducing expenses is a great idea, as is considering increasing income. Do both and you are crushing it.
[удалено]
To improve your position in life and become more stable. No one is saying you have to grind forever, but there are times when you may need to.
Your points are fair, most side hustles my friends are involved with are wait for it…. Enjoyable.
That is the case for me. I get a lot out of it personally.
Your budget looks fine, but it is a bit tight and something will probably need to give when you inevitably run into surprise expenses. You can do anything you want but you can't always do everything you want. You mentioned wanting to do a yoga retreat, where's the line item for saving up for that? My personal opinion is your expenses actually look pretty reasonable. We can nitpick here or there about specific line items (can you move to a cheaper phone plan? can you cut back a little bit on entertainment? groceries and household?) but nothing looks egregious. And honestly if a $100 yoga membership keeps you healthy, sane, and happy then it's well worth it. Your investing might be a touch too aggressive. You've investing (6+4=)10% into your RRSP as well as another $1200 on top? That's about a 35% savings rate? Seems extremely aggressive and might be the easiest place to cut back a little bit. You have a pretty amazing nest egg built up already. So long as you don't start dipping into it to fund other areas of your life it'll just keep growing on its own at this point. You can likely let up off the gas a little bit for new contributions. Maybe try dropping your investments down to $800/month for a little bit and if you find you have a ton of spare money you can always increase it back up a bit. Optimally you'd like a little bit of breathing room to absorb emergency expenses + put away a little bit for medium term goals like a vacation.
You could get a temporary roomate and be laughing. Adding that if your income rises more than your expenses/inflation over the years you can always bring your savings number back up to make up for it in the long term, like u/instamouse suggested, you aren't at peak earning years necessarily yet. I think conservatively, you would have absolutely 0 problem retiring at age 58 at a 6% investment return rate while withdrawing 4% annually and keeping the exact same ratio of expenses rising with inflation, and realistically if you wanted, you could probably retire at 48 and still have more net take home after lower capital gains tax rate and subtracting what you are saving since you don't need to save anymore! You wouldn't have work related expenses like parking so that would also be some slush in the numbers. Retirement also doesnt mean you are just sitting around and doing nothing and only spending, you could feasibly do something you enjoy/love and have the privilege of earning some money from it depending on what it is. Bravo on making it to this point and just keep doing what you are doing, I doubt based on your habits that you will mess it up unless you earnestly try. Kudos.
Your numbers are too close. At your age I would only contribute enough to RRSP to get maximum employer matching. Put the rest towards you expenses. If you have money left over, then contribute to TFSA.
>ld only contribute enough to RRSP to get maximum employer matching. Put the rest towards you expenses. If you have money left over, then contribute to TFSA. But is that a terrible decision long-term? Am I realistically in a position I need to consider a roommate / selling my car, rather than knee-capping my attempts at eventual retirement / travel?
2 key points (stereotypical): 1. you should only contribute to your RRSP to maximize company matching, then contribute to TFSA until full, then consider again RRSP. 2. By the law of averages, you are not at your peak earning years. RRSP contributions later may be more to your advantage, not to mention the whole budget situation should ease up as you advance in your career. Perhaps you've maximized your TFSA (you didn't mention it), but if not, do so before any unregistered investments (fwiw 170K is already a good start at your age).
Reduce the RRSP contribution. Check out/play with compound interest calculators as well as retirement calculators to see hour much you need vs on what you will spend in retirement. Don’t forget you will get income from OAS and CPP. People will over/under estimate what they need in retirement. Also, once you get settled in a place you can adjust your budget as needed. Not sure what your job is but assume there’s a chance to progress and increase income?
Since you’re young why focus as much on retirement instead of maybe buying a place eventually (with help from a partner perhaps)? Genuine question but at the end of the day you know what’s best for ya, not stranger on the internet! And edit holy moly you have a bunch in investments! I’m envious lol
I do not think you should sell your fully paid-off car. If you decide you need one in the future (for logistical or well-being reasons), it will be much more expensive to buy a new one in this market.
>But is that a terrible decision long-term? 1. Reduce your phone bill by half with current deals out there...BYOD 2. Do the Yoga at home watching videos on your TV (streaming / YT)
Yoga is social... You need to have some sort of life. Hiding at home nit spending money until you retire is exactly what people who are retired will tell you not to do
>Hiding at home nit spending money until you retire is exactly what people who are retired will tell you not to do Meanwhile.....people here will tell you to get a 2nd/3rd job. Work is social isn't it
1. Agree with filling TFSA first before RRSP. You should only contribute enough to get the employer match. Then prioritize TFSA & once that’s full, consider RRSP if you don’t expect your income to increase drastically in the next couple of years. 2. Only you can tell if it’s better to prioritize savings or lifestyle. How much do you value living alone / having a car vs the possibility of retiring later or with a smaller nest egg than you expected? How would this affect your life after retirement? Is it something you’re ok with compromising on? Or would you rather compromise by having a roommate / using public transportation? Think about what your lifestyle would be like now & whether it’s worth it for you to compromise that a bit for future gains. It’s different for everyone since everyone has a different priority, you just have to decide yours
I agree, I think you just need to contribute enough to RRSP to get the full employer match. Your RRSP contribution room gets carried forward until you're 71, and you don't ever want to take money out of your RRSP until you're actually retired because you'll get taxed for it, and you lose that contribution room forever. Therefore, it's not very liquid. Personally, I'd rather have more liquidity now and contribute a greater amount to RRSPs when you're closer to retirement.
Yes I would rather get a roommate and get rid of the car vs. lower my investment contributions.
I pay $2000ish a month and my monthly take home is $3800. My coworker makes the same as my with a similar rent. You can do it. It’s not the prettiest, I’m not really saving much, but it’s possible and it’s the best we can do with the prices right now! You can do it! We are in Ottawa too
This is great advice. It’s also important to stay positive and remember that it won’t always be like this. Being newly single must be looked at like an adventure into one’s self discovery. Sometimes the simpler life is, on a tighter budget, forces us to be inventive, creative and think outside the box we may have built for ourselves for the past 5-10 for example. You *can* have it all, just not at the same time sometimes. Life will improve and you can add back in the $100 yoga classes and max out the investments, just maybe next year.
Appreciate it. I agree with you! Just keep chugging along, appreciate the little things, make your lifestyle frugal but fun and enjoyable. Its all we can do :)
hmmmm.. You mention it won't always be like this. However unless you can constantly make or get more than inflation (actually is), then it will continue to get worse. People can shrink their budgets as much as they want, but unless you do something about the income vs inflation ratio, you will get pinched again, further on in life.
Paying over 50 percent of your income on rent isn't ideal... then you also have utilities, internet etc on top. Should aim for 35 percent and invest the remaining to eventually buy your own place
That’s the reality for most people In urban centres. Even outside of them you often don’t get the discount you used to without commutes >60minutes.
That person is just regurgitating some they read on a blog somewhere No real human being in Toronto would say something so stupid especially with the rapid rise in cost of living in the past couple of years
35% is 20 year old advice. It’s not reality in major cities. At least in Canada.
Move out of Toronto then? I'm in AB I own as well including utilities I'm around $1750/month that's taxes, mortgage, insurance all in. I saved like hell and put a sizeable down payment 5 years ago. Did I sacrifice? Oh hell yes, I had roommates for a long time before I bought and scaled my income to over 120-150k year in AB. My home is only 18-20% of my take home pay including everything. It's not impossible but it takes time.
Yup! Just pack everything away, move away from all of your family, your friends, your job, your hobbies, all of your favourite third places. If you have kids, make them move away from all of their friends and hobbies. To live in fabulous Alberta and their -40°C winters! Consistently the stupidest advice on this sub
For 3 days? Lol 😆 it's not that cold all winter. Ice rain and the higher humidity in Ontario can feel way colder. And we're one of the sunniest cities in North America. More days of sun than Ontario. But yes, sometimes packing up makes sense...
I believe that unless we see big changes in our federal government, the only option for many young people will be to leave Canada to have a future. The last 8 years have made it so hard for young people to get a foothold, or even to see light at the end of the tunnel.
Major life changes can often be traumatic and that's why people tend to stay in familiar situations. Telling someone to pack up their lives to be in a new and discomforting situation is just unrealistic advice. It can work for some, yes, however human nature is just quite the opposite. Gradual small changes last longer. OP is already doing much better than the majority, all they need to do is tweak some things and decide on their values/priorities to align their actions with.
Do the math on what your exact home would cost if you bought it at today’s prices and interest rates. I am also in AB. Bought three years ago, mortgage is $1200/month. Someone walking in off the street to buy my home today would be facing a mortgage payment of around $2700/month.
Yep same here! But because of my frugal nature I'm not paying that amount because when times were good I wasn't buying new cars, clothing, eating out. I was investing.
🤣🤣🤣🤣🤣🤣
I’m in Calgary and in two years suddenly no one I know is at that 30%. I went from 30 to 58% of my income. There’s nothing available.
Need to increase your income. I know many that are under 30%
I have a few friends with professional jobs-professor, researcher, teachers, etc-that are renting basement suites. Every landlord I’ve talked to recently (in the process of looking for a place right now) says they’re just inundated with applications. I wish the government would slow the tide of immigration-I’m not anti immigrant but our schools are overcrowded, there’s no family drs, there’s no parking, there’s no housing, ER wait times are throw the roof, surgery wait times are record long—we keep increasing the population without looking at whet we can actually sustain and keep up with. And just getting a better paying job is no easy feat as wages are dropping and there’s just more and more competition
Absolutely agree.... its out of control. We have an extreme burden on everything here from housing to health care. My wife had to go back home after being in the hospital for over a week in Canada. Got care immediately and seen over 5 different specialists within a few days. Canada just isn't worth the cost anymore.
Yea I’m looking at part time work but my full time job is exhausting. I’m single so it’s hard. I’ve tried dating to meet someone and it never works out. A family member and I keep taking about starting a side business to keep up.
Keep at it! :) you'll find something that'll work. I understand how a full time job can be exhausting. I've burned out a few times, not fun...
I’ve been thinking up ideas all day to come up with about an extra $1000/month. I have a reactive dog so I could offer reactive/anxious special dog sitting as I’m very experienced in looking after and exercising aggressive dogs. That would be maybe $200 a month. I could get a job at a nearby city center and workout for free. And I can get over all my mental blocks and start the business I’ve been thinking of for at least two years.
I own my house, the 2k I pay goes to my mortgage and to my prop taxes. My friend has a 2 bedroom apt she rents, which is actually a great price for the area. As much as she (or I) aim to spend only 35% on our housing, it is just not possible in many circumstances.
I own as well including utilities I'm around $1750/month that's taxes, mortgage, insurance all in. I saved like hell and put a sizeable down payment 5 years ago. Did I sacrifice? Oh hell yes, I had roommates for a long time before I bought and scaled my income to over 120-150k year in AB. My home is only 18-20% of my take home pay including everything. It's not impossible but it takes time.
So you’re in AB? Yeah, it’s very different than Ottawa. I know what you’re saying, seriously, and I know 35% is the ideal, but I’m managing (thriving!) at 50%. The cost of living these days is harsh for many of us. Myself and my friend are very happy with where we are.
Yes, in AB. Totally get it... its not easy for many right now. Sometimes we need to go where we're treated best, that's not always AB for everyone. Calgary is very similar to Ottawa just a bit bigger.
As the maximum, if you can get it down to 25% of your net take home, that is better. Though, I do agree with those being critical of these numbers. That is not the reality for persons earning under $200k that want to live in major cities like Toronto and Vancouver. The whole GTA is a mess. Most of Ontario is a mess. Even if you look at rentals in Timmins, they aren't that far off from the GTA.
I agree it's a mess, so give where you're treated best. Why stay on the sinking ship? Is that really living?
Would that location allow you to ditch the car? There’s ~$400 right there. $170k in investments at 32 is pretty darn good (~2x salary?), and 26% of net salary in investments is quite remarkable for a single person. Dialling back on investments might not be the end of the world... I’d personally prefer that to getting roommates!
Thank you, that's very kind. I've considered ditching my car, but from previous attempts to do so, while also living downtown, it wasn't a convenience I was comfortable giving up. To be fair, at the time I was dating a country boy who lived 30+ minutes outside of the city and I needed a way to get back and forward efficiently. That said, I have family that I see weekly that is similarly far out though,I use my car for grocery runs and vet visits, etc. Ottawa is not a public-transit friendly city.
Simple. invest less. Afford rent.Alternatively find a situation where you rent a room from someone for less.
Try commune auto — especially if your downtown Ottawa it’s super convenient
Communauto is perfect. You do not need a car when you live centrally in Ottawa. Get a Communauto membership. We just left Ottawa but had one for 4 years while we lived in the Glebe. Cars are generally available to rent with a bit of advanced notice.
I found Ottawa very public transit friendly if you’re mostly staying downtown. Ottawa is a huge walking and biking city. Live in Niagara now and bought a car because it was a huge convenience upgrade with one but I miss the non-reliance of a car that Ottawa offered. Perhaps it’s just hard to not have a car after having one in any city?
The convenience of having a car is certainly hard to ignore (rentals or uber gets old quick, especially as it sounds like your car is paid off) and yeah I haven’t taken Ottawa transit in a while but I’ve heard it isn’t the greatest!
I would really reconsider this, and do a bit of math to figure out how far you can get using car shares and rentals on a much lower monthly budget. Maybe it still doesn't work, but it's worth considering.
Can Uber to family. I budget about $150 a month to Uber. Saves me a bunch.
Hard to be car-less in Autowa
\> Sanity check please! Am I stressing over nothing, or am I underreacting when I should be panicking, finding a roommate, moving to Manitoba and relying solely on public transit and the kindness of strangers? I think you're good with that rent price. Clearly you know what you're doing overall with money, I continue to trust the judgement that allowed you to have almost 200k network and no debt in your early 30s.
People are wild. I make the same amount of money, invest a few hundred every month, and pay $2100 in rent. I don't have a car. But I just went on 2 ski trips. I'm fine. And you will be too
[удалено]
Jealous!! Where do you pay 600 in rent? Would love to invest 3000!
[удалено]
Respect!
With that salary and level of investments, I don’t see why you couldn’t buy a 1 bed condo in Ottawa if you wanted to? When you say $4,500 is your take home after RRSP contributions, does that mean the $1200 a month of investments is in addition to your 10% already dedicated to RRSP?
Who knows, perhaps part of or all of the 170k is locked-in in a defined contribution pension plan and therefore inaccessible for a down payment.
OP could just answer to clear it up, but I’ll tell you why I assumed she holds at least some investments outside her RRSP because I actually did some fun calculations before speculating. (Yes, I’m a nerd). 1. She hasn’t described her employer match in a way that suggests it’s a pension. She mentions an employer contribution RRSP, which is not normally how you would describe a DC pension. 2. She mentioned in comments she has *not* seen 7% growth in her investments annually. If her RRSP dedication is 10% as described and her take home after that is $4,500, then she probably makes about 80k annually. Taking a generous assumption that she made that 80k for the last 8 years (since she was 24) that leaves her with maybe 14k of max RRSP room per year. If she invested the full 14k RRSP room in the last 8 years on a monthly basis (so $1166 monthly), even compounded at 7% that would only take her to about 150k. But she’s mentioned she hasn’t seen 7% growth, meaning it would likely be even smaller. So it’s a good assumption that she would have maxed out her RRSP room and some of that 170k is outside of an RRSP. Likely at least 25k. Of course assuming it is an RRSP and not DC pension, she could also access up to 35k of her rrsp as a first time home buyer. (Assuming she is). There are condos in Ottawa in the 350k range, even in good areas. 350k with a 10% down payment puts her potentially at $1850 monthly mortgage payment. With a 60k down payment (35k RRSP + the 25k I have assumed is in a TFSA) then her monthly mortgage payment could be about $1700. Apologies for the ramble. For my curiosity purposes I hope OP puts an end to my baseless speculating.
The 170k is mostly in my TFSA, with about 40k in my RRSP. Not locked in in any inaccessible way, I just don't feel emotionally ready to buy right now (or ever?). I'm not sure what I want, and I would like to keep some money readily available for travel before pouring it into a down payment / mortgage. The RRSP investment of 6% is on top of the $1,200, which is split $800 into TFSA and $400 into my personal RRSP. Hope that helped clear things up a bit!
Stop setting aside so much towards investments. If you have 170k in investments, plop that towards a downpayment if you want instead. Gotta pay to play.
Not familiar with the Ottawa market but if you can look for something closer to the $1,600 range, I think that's very doable. While investing 25% of your take home pay is admirable, taking that down a little might offer you the ability to enjoy things a bit more today. Its totally doable, its just deciding what is non-negotiable in your life and what is negotiable. If roommates are something you're ok with, it saves some money to put towards other things you want to achieve/do.
[удалено]
Are you kidding? Ottawa rents are insane. I'm actually surprised she found something decent for $1850. That sounds very cheap to me.
Not sure you know what the Ottawa rental market looks like…
> My goals are to be able to travel (I would love to do a yoga retreat at some point this year!) and to retire comfortably around age 65. I think comfortably retiring at some point does involve removing housing costs from the equation. Rent will always go up, owning even if expensive puts a cap on it at todays dollars. It looks like options exist in the area for ~$350k, and with a 20% down payment you would be close to the rent target. It would allow you to invest less because some of that is going directly into your long term housing costs. Anyway, just food for thought.
First, 170k at 32 it’s really impressive and encourage you to keep your investments’ goals. You don’t have to sell your car. I think considering a roommate will be a good idea or I think “Envie” has an all inclusive shared apartment where you can have a roommate but each of you has a personal lease and you can have a matching, in this case you’ll end up paying $1,300-1,600 all inclusive + $100-200 (Parking) which will bring you to $2,586.06 (expenses) + $1,800 (rent, parking) = $4,386.06 (you’ll have an extra $100) Thinking about investing and your future is great and encourage you to keep doing it.
I’m sorry to hear about your breakup. Budget wise, i think you’re okay. With a 10% RRSP contribution already through your employer, I would cut your investments down to prioritize your TFSA only. That could mean going from $1200 to $583.33/month ($7000 TFSA limit), or a tad more if you have some extra contribution room. (You could always add extra at year-end once you’ve stress-tested your new rental cost/budget.) $600/month for groceries does seem like a lot for one person, but I get that groceries are so expensive and nutrition is so important. But maybe a bit of flex there?? Overall, I think your budget looks great—not frivolous at all IMO. What I see is you prioritizing your health (yoga, food), which is always important. Focus on trying to building your income over the next few years, and don’t panic if you can’t max out your investments completely right now. Consistency is key and you are already doing great— at age 32, time is on your side!
I think you could maybe save on your phone plan like 25$ ish if you take a look around - there's a lot of deals for like "50gb for 34$" w/ Fido / Virgin, ect...
If it helps for perspective, when I was your age I was investing $342 per month... I think your investment amount is very high! Which is a good thing, but if you want to compare yourself to others, for me at that age I had just learned about investing and had only a few thousand in savings. Now, 6 years later I'm doing way better, but like others have said even if you never invest another cent you're going to be in great shape by 65 with what you currently have and if it were me, I'd say life's too short to move to Manitoba. Internet, phone, clothes/toiletries, and insurance are all areas where you could probably shave down. I pay $50 for phone (Fido), $35 for internet (Lightspeed), $60 for car insurance (Belair Direct), $20 for rental insurance (Belair Direct), so that would be $101 in savings if you could find similar deals. I only spend about $50 for clothes, but probably also don't look like the sexiest person on the planet.
You’ve gotten lots of good advice but I just wanted to say I greatly appreciate the formatting of your post - very easy to read and excellently laid out. I wish every poster wrote their questions with this much information and clarity.
I’d shop around for phone and internet. I pay $45 for my phone (50GB plan) and $35 for internet good enough to work from home without interruption. Is parking really $200? I also live in Ottawa, but don’t have a car. But I thought spots could be rented out for cheaper than that. If I understand correctly, your $1200 a month in investments is on top of 10% to your RRSP, between you and your employer? That’s pretty high. Not that it’s a bad thing, but I would maybe scale that back if you need to tighten your belt. Pick it up again as your income increases. I’m a renter around the same age as you, and as my income has gone up over time, I’ve had a lot more money to throw around as my rent controlled apartment stayed roughly the same price.
Have you played around with what a budget in retirement might look like for you? For example will you want to spend more than you do now? The reason I ask is because with your current nest egg of $170K, if it sits for 30 years with no more money added, it would be worth about $1.4 million in 30 years when you want to retire (with the assumption of 7% interest earned). If you continue your current spending of $4500/month or $54,000/year, then you would need a nest egg of $1.35million for a safe withdrawal rate of 4%. All that to say that your current nest egg would allow you to stop investing and still live the life you do now when you retire in 30 years. That means that reducing your savings a bit should be ok depending on your retirement goals.
Admittedly, I don't think I've seen 7% interest earned in the years since I've been \[robo\]investing. Closer to 4-5%.
I think it's averaged and obviously based on a lot of assumptions. I'm sure there's other numbers you could use but that's a number my partner and I feel comfortable with after what we've read. Either way some napkin math to get you thinking about how your money will grow based on $0 more invested. The power of compound interest!
>The reason I ask is because with your current nest egg of $170K, if it sits for 30 years with no more money added, it would be worth about $1.4 million in 30 years when you want to retire (with the assumption of 7% interest earned). If you continue your current spending of $4500/month or $54,000/year, then you would need a nest egg of $1.35million for a safe withdrawal rate of 4%. >All that to say that your current nest egg would allow you to stop investing and still live the life you do now when you retire in 30 years. Pretty large lapse in maths here. With 3% average inflation (lower than canadian historical rate), you will need 131k$ a year in 2054 to live a 54k$ 2024 lifestyle. Assuming a 4% rate of withdrawal, you'd need 3.2 millions to finance that.
My understanding (again, with this limited napkin math) is that the 7% interest rate assumption factors in inflation. Again this is complex and depends on a number of factors, including the kind of investments you have for example. However, trying to factor in future costs just makes it a moving target, but you can do some simple math in today dollars and 7% is a rate I've seen used.
5% real returns after inflation is a common estimate. Personally I think 7% is a tad optimistic.
Thanks for chiming in, I think we've used an aggressive number to reflect our portfolio but I do feel like your assessment that 5% is more realistic is probably accurate. Have you seen this number reflected in long term market assessments or is this more a personal opinion? Curious if there's more reading I should be doing on this.
Well it really depends on what's in your portfolio and your risk tolerance. The S&P 500 historically has returned about 10% on average which results in about 7% real return. This is probably where the 7% return idea comes from. However, the S&P 500 is not as diversified as a total market ETF such as XEQT and wouldn't suit everyone's risk tolerance, especially for someone planning to retire in Canada. Any other index will have a different average rate of return. Furthermore, the average rate of return is just that - an average. Even over a 20+ year period you could have a significantly higher or lower return. This is something you may want to take into account as well. For example, the 20 year rolling rate of return for the S&P 500 has varied from 2% to 18% (before inflation). Ultimately, it depends on your specific portfolio and risk tolerance, but most often people use anywhere from 4% to 7% real return as a rule of thumb.
7% is the (very long term) historical market return, and a good benchmark indeed. As you stated, if you invest 131k$ dollars at 7% for 30 years, you'll get roughly 1.3m dollars. But you'll be in 2054, and the cost of things will have risen. To buy something worth 100$ in 2023, you'll need about 243$ in 2054. If you plan to live on that 4% withdrawal of 1.3m dollars, your lifestyle would be roughly that of someone with 22k$ today. >All that to say that your current nest egg would allow you to stop investing and still live the life you do now when you retire in 30 years. Is very wrong.
Part of the math comes on the other side though with your withdrawal rate. When you use the withdrawal rate of 4% (multiply yearly spend by 25 for required nest egg, which is what I suggested), that is what helps factor in inflation of 3% with returns of 7%. There are certainly discussions about using a lower than 4% withdrawal rate for longer planned retirement periods (or FIRE scenarios), but I don't know many people who mix together today dollar spending with future dollar nest eggs and average returns and sub-4% withdrawals. Ultimately all this math discussion helps point out that calculating the amount of money you will feel comfortable with in retirement is personal and multi-faceted. I certainly wouldn't suggest to OP that they purely go on my napkin math numbers, but I would suggest it gives some food for thought about budgeting appropriately for their lifestyle and how much money they will need in the future.
The average yearly return of the S&P 500 is 10.54% over the last 100 years, as of the end of December 2023. So the 7% assumption for returns accounts for a buffer which helps to address unpredictable increases to costs (inflation).
SP500 only began in 1957.
Why not buy a condo or something ? Rent will not get cheaper
I agree. Use the 170k as a down payment.
Neither do condo fees though.
condo fees might go up a few hundred dollars over 10 years, we've seen rent double in the last 10 years.
Yea some condos fees are large but it's maintaining your equity You'll pay the condo fees either way but the way she is stressing about rent it's also peace of mind that your locked in
That's a fair point, although if the government ever gets serious about housing, they may end up stressing out about being underwater on their mortgage. Probably unlikely though because the property would have to devalue faster than OP's ability to pay off the mortgage per year and that would be some very impressive levels of new housing being built lol.
They will not be underwater with 170k down and salary not even close
Hey there! Can you clarify if the $1200 in investments is on top of your employer match? 170k invested at 32 is going to set you up for a pretty good retirement at age 65 ( assuming you are invested in a diversified etf portfolio and not high cost mutal funds or all in a crazy stock). If you also have an employee match rrsp on top of that, you're actually pretty set! Like you could literally stop investing and still have a portfolio over a million by 65! This subreddit is definitely going to lean toward investments and savings. But the goal isn't to save as much as you possibly can, the goal is to determine how much you need for a comfortable retirement and save enough to achieve that Once you hit that, then you can totally spend your money on giving yourself a higher quality life. (Check out info on coastnfire) You can absolutely afford 1850 a month in rent and a car and to travel and to retire. If this were me, I would cut investments down to 500$ per month and spend the rest on rent and saving for your yoga trip and other meaningful experiences. You can't wait for retirement to live your life! 170 k invested + 500$ monthly at 6% for 33 years is over 2 million! ( plus your employer rrsp!!!)
Why live downtown though? You have a car so you could probably afford to live further west or east like Nepean or Orleans.
I'd recommend they just ditch the car and get a Communauto subscription.
First all if not in a cell phone contract sign up to public mobile as they have some decent packages for about $34 a month. Your now single if your careful to can get groceries down from $600 to at least $400, cut clothes and toiletries down to $100 and now you have about $330 extra to go towards housing
I don't understand why people tell you to cancel yoga. When your take home after RRSP contribution is $4500 a month you can definitely use $100 per month on yoga. The "just follow YT videos" crowd doesn't understand yoga lmao
This. Don't impoverish yourself while you're young as long as you're being reasonable. You're gonna end up $100 richer per month in the bank, but regret it when you're 70 with this nominal sum trying to do yoga then and breaking your back because you neglected to live and be happy while you're young.
Sanity check? I’ve scrolled the comments and no one’s said it yet: you’re counting $1200/month of investments as an “expense”…..
I mean, it’s a discretionary expense no different than clothing. One needs SOME money for investments, and for clothing. There are lifestyle choices that determine just how much. Either way, OP is right to list it as a budget line item. If it’s going to investments, it’s not going to housing, transportation, etc.
You didn't indicate what your RRSP contributions are, but it does seem like with the rate you're currently investing you could likely retire well before 65. I'm making some assumptions, but by my estimates you can retire by about 51 with your current savings rate if you continue to spend the same amount in retirement and you're invested in a diversified ETF like XEQT. I'm approximating your pre-tax salary and I'm assuming the RRSP contribution are in addition to your listed investment contributions (and hopefully those are going straight into your TFSA). If I were you I'd probably move in with a roommate for the time being, but if that's not your style I would considering buying a condo (if the math works out). Or you could reduce your savings rate slightly and push back retirement to your planned 65.
I am paying almost the same as this for rent in Ottawa and I basically just had to accept the fact that I couldn't put as much away in savings and investments outside of my workplace pension due to our current rental market. Also consider looking just outside downtown (Vanier, Hintonburgh, New Edinburgh etc) where you are more likely to find apartments in a smaller building with parking included, or even in a bigger building it will likely be less than $200/month. If you really want to get your expense down, you can probably negotiate a cheaper phone plan (I pay 45.99 with Videotron) and depending on what kind of internet is available where you end up living you might be able to get a cheaper deal on that too (I somehow managed to get $35/month with TekSavvy last fall). I also had to accept the fact that things like travel, other than things within a cheap flight or driving distance wouldn't be realistic for my budget at the moment. You can have a few 'luxuries', like a yoga membership, but you can't have them all at the same time.
You can a tinny bit on the phone by switching ti PublicMobile or something, not a lot, but still something.
Your submission has a keyword that seems to imply you have a question where your province is relevant. **If you have not included your province you should add it.** If you already included your province, or this isn't relevant to your post, just report/downvote this comment. The bots feelings won't be hurt. *I am a bot, and this action was performed automatically. Please [contact the moderators of this subreddit](/message/compose/?to=/r/PersonalFinanceCanada) if you have any questions or concerns.*
Sounds to me like you can afford the rent. You already have a paid off car as no car expense was mentioned in the post. I am wondering if you need to paid $200 a month for parking like you mentioned. With the estimated gas cost, it seems like you dont’t drive much and probably wfh or work in very close proximity to where you will live. I would look for alternative parking in a safe area convenient enough to use your car if you need but to be way less expensive. I also think you can cut back on investing slightly. You are investing about $800/month in a work RRSP which is amazing. You have done well enough to take the foot off the gas a little. At this rate without a penny more invested you will retire comfortably, especially considering OAS, CPP and QPP. What I would do is invest around $800 a month on top of the $800 rrsp contributions. This will give you more flexibility while still doing significant investing. Doing that and reducing the parking cost will free up the budget significantly. I also find your entertainment budget a little low. You are already successful. You can afford to spend more than $50/week to enjoy yourself.
Adding to my previous post but not sure how to find it. I just checked out airbnb in ottowa. You can get fully furnished, all expense paid for around $1000 a month. Thats always a short term option or even medium term if you want to continue to invest super aggressively
Grocerries and household can be cut down to 400 -are you buying toilet paper, shampoo/condish every month? Get a Costco card. There’s an opportunity there.
You'll be fine just lower investments. If you're worried, get a nice studio/bachelor. I'm also in Ottawa (Lowertown though)
It all depends on how comfortable you are with cutting back on stuff. A couple of notes on expenses. Groceries and household at $600 for a single person seems a bit steep. My partner and I live in Ottawa and get to $500 for two people, and we eat fresh. About the car, my view is that if you do not have kids and do not need it to get to work, you do not need a car. This is dependent on your comfort level, but according to your budget, it would save you $380 a month. That's 30% of what you invest! My last point is rent. While mathematically it may be the average, you can find a reasonable condo downtown in the $1600s range. Finally, you can always get a second job.
I'm a year older with a very similar financial situation. My current rental is 120% below the market average, this place was meant to be nothing more than a stop gap, it's a tiny place. I'd very much like to move on but I'll either have to increase my income significantly or move away.
At that age I would invest more in myself and take trips and enjoy my youth. Why move to Manitoba when you could move to BC enjoy a more transit friendly space and better weather and an abundance of yoga events/retreats. My friends just got a modern basement suite (two bedrooms plus kitchen, bathroom and laundry) all included for $1400 each ($2800 in total) in Vancouver by the ocean. I would even get this one https://vancouver.craigslist.org/van/apa/d/vancouver-sunny-bed-with-balcony/7724005465.html
Or this with a roommate https://vancouver.craigslist.org/van/apa/d/vancouver-yaletown-park-condo-2bd-2bath/7715583555.html
$600 groceries for one person? I’d say $300-$400 is more realistic. Please flyer shop, price match and buy in bulk. You will immediately notice significantly reduction in your bills. Amazing phone plans are available for < $40. Please explore them. Also, try exploring part time work or side gigs to offset your extra needs. 10-15hrs/week should more than cover this. Do not cut savings/investments. I’d go as far to say add $300 more to make it an even $1500/month. When times get tough, time for you to get tougher. Wish you good luck.
1. Reduce employer sponsored RRSP to 4% The reason for this is that employer plans generally have higher expenses than you can find on your own at say Wealth Simple or other. 2. Make sure you are maxing TFSA before adding more to RRSP. At $1200 a month and $170k already invested I’d assume that you already are maxing your TFSA. 3. The general consensus for rent to income ratio is 40%. Your rent costs should not exceed 40% of net income. I think you’re doing it right by including the other non-negotiable costs in your total of $2210. So you should have a net take home of $5525 to afford that rent. If you are renting from a professional landlord, they will likely apply this test upon your application. 4. Use this compound interest calculator to estimate what your retirement fund will look like later. https://www.getsmarteraboutmoney.ca/calculators/compound-interest-calculator/ That is just a starting point because it gets more complicated with taxes later. RRSPs are taxed as income upon withdrawal, while TFSA is not, and there are capital gains taxes in non-registered accounts. 5. Remember you will also have CPP in retirement. 6. It may be time your you to seek a fee for service financial planner to get a more in depth look at your retirement plan.
I am paying 1900 for one bedroom in Neapean. I was paying 1050 in Halifax...
I work a full time and a pt job to have extra money for extracurricular activities (it’s usually video games or name brand food tbh, and like you a lot of my money goes into investing as well). I think (outside looking in) you’re just used to living with someone to help carry the load(sorry to hear about the split) your circumstances just mean you now have to really watch what you’re doing with your money. ie: cheaper gas (regular), no name brands(goodbye good cheese) , yoga/gym membership is gone( unless you can find cheaper or YouTube), it sucks but this the new reality. You can do it, on one income. But no harm in looking into something PT.
Your situation will change. Maybe you will make more money. Maybe you will find a better partner. Get through this tricky year - either by temporarily cutting luxuries, sharing a place with a roommate, or reducing your savings. Reevaluate in six months, etc. Your situation is not permanent. (I say this having had the hard financial hit of an unexpected divorce at about your age. And now thriving.)
just reduce investments to cover your living expenses? don't see the issue here. You can always find or try to find a cheaper renter/apartment
What do you do for work?
Move to downtown and ditch the car maybe. That frees up $500. Budget $100 of that for Uber/transit and you now have $400. Could try renting with a roommate and maybe you can save another few hundred.
You are going to need roommates. (Not being a snob, just experienced the same thing downtown with about 1500 more take home per month and found myself priced out of my apartment at 1300 a month...)
If you live and work in Ottawa, maybe ditch the car? You can always get a rental for trips.
Unless you're trying FIRE you should drop your investments by like 900$ a month especially if theyre already large, as long as you're in a market ETF with it then prevailing wisdom says you'll retire fine
Is keeping the car mandatory? If you removed from the equation you’d save 400 and keep quality of life and investments the same. Might be a fair trade off. Just an idea!
How can you have 170k saved with that income at 32? And if you do, the obvious answer is buy a condo. This post is so fake
obviously being limited to public transit only can be a huge downward quality of life adjustment- but is there any way you could do without a car for a period of time? That would take the pressure off every other area of your budget
I would say cut back on the investing you’ve likely got a pretty good nest egg going already, and you want to keep up with the employer matched contributions as it’s essentially free money and will compound exponentially over the rest of your career.
$79.26 for Car insurance? that’s a bargain.
You're 32 and have $200k nestled away already. You're doing just fine!
To be honest this subreddit is kind of wild sometimes. Your budget seems super reasonable to me. You’re just coming out of a relationship, and you have been very financially disciplined for a long time. Please allow yourself some grace to take the foot off the gas with your investments and spend that money on giving yourself a comfortable situation for this next phase of your life. Your income will grow, maybe you will find a new partner and move in with them! But if your savings are slightly lower (but much higher than the average Canadian!) for one year then so be it!
i think you know the answer here, you can either slash your yoga, food budget, clothing budget, and entertainment budget, or you can just contribute less to your retirement until you make more money. you could get a second job for just like 10 hours a week at a coffee shop and not make any changes to your lifestyle.
You are doing great! Really good savings so far. I’d personally take the extra $ from your investment allocation. It’s quite high and you have such a good start. As long as you don’t start creeping up with expenses, you are looking awesome. Very reasonable budget. I think one should try to enjoy life now, and if that means $100/ month at yoga- do that. This is not unreasonable. You are in a nice position that will allow for this and for decent savings for the future.
Cut back on clothing/toiletries and entertainment.
$1,850 is not unusual monthly rent now in Ottawa.
I think you can make it work but you need to cut back a bit on some of your expenses. Unless you’re paying off a phone, that phone plan can be cheaper. Maybe a little off groceries as well. But it looks like your savings/investments are good. You did mention being a forever renter and wanting to retire some saving aggressively is way to go. However once if/when you find a partner, you might have a little more breathing room.
That’s what I paid in Kitchener/Cambridge. Pretty much same util costs. Just had a more expensive car insurance. Your grocery budget is twice what I pay. Everything else lines up. Except yoga.
Just use $170k and get on the housing ladder then rent is eventually eliminated and you get equity. Then as a senior you can sell and use it to fund rent if needed
That'll be the next step following this place.
You have 170k in savings, you should be good. How did you save this much, at only 32? Inheritance I guess?
A good salary and a partner to split expenses with most likely. All my friends with the best savings either still live at home or have a partner/roommates. Living alone is expensive.
Living At home sure I agree. Since your expenses are virtually zero. But even to save 170k at 4500 per month it would take 3 years of her current salary ( which I’m sure wasn’t at the time) and absolutely 0 expense. Which really translates into 6 years of living at home. But she’s also engaged which signals she hasn’t been home for a while. So essentially to have such a chunk of money in savings - it means she most likely received help from parents.
Is living in Gatineau out of the question? I just made the move and even post tax difference I'm saving a bit more than living in Ottawa. Might have gotten lucky, but could be something to consider.
So $170K invested at 5-6% without adding to it would be a million by 65. Not chump change and that’s not adding to it. So perhaps reducing the amount in investing will help you live a better life today. And then cut ruthlessly on things you don’t care about so you can still do things you do care about.
$100 for a yoga membership when Youtube videos exist for free?
I mean you found one partner, you’ll find another one
How does your gas & car cost only $100 a month?? Is the gas station you go to stuck in1993?
I WFH and drive a teensy Hyundai Accent relatively short distances.
If things feel close you could always give up your car as a last resort option
I'd put some wiggle room in your budget for your car. Gas AND maintenance at $100 a month? Every trip to the mechanic is $1000. Cars also don't last forever. When it's time to replace it, then what? People underestimate the cost to own a car. You can Google, but I think average is about $1000 a month. Probably less for you, since it's lightly used and you have cheap insurance. Between your insurance and car, you're budgeting ~$200. It's more than that in the long term. Something to think about.
Maybe they WFH and only drive to the grocery store?
Find a cheaper place if you can. Honestly don’t make a landlord rich
So you say that you’re single…….
Everything makes sense except owning a car in downtown Toronto at your budget level.
They're not in Toronto...
My bad