How much does it cost to move out in Toronto?

How much does it cost to move out in Toronto?

Ah… the question of every person who is at an transitional stage of their adult life. Finally flying out of the family nest.

This post is only going to look into the costs of moving out from a financial standpoint. Later I will write the intangible reasons whether or not to move.

1. Essentials

Things you absolutely can’t live without and should be fixed:

  • Rent
  • Utilities
  • Food
  • Transportation

2. Savings

We tend to forget that once we move out, it does not mean all of your funds should go into expenses. Saving for a rainy day is a must.

3. Discretionary Spending

This is another bucket of fixed expenses that would include:

  • Internet
  • Phone Bill
  • Other subscription

4. Miscellaneous household items

Let’s be real here. You’re not going to move out just to hole yourself in your room.

  • Eating out
  • Clothing
  • Entertainment
  • Hobbies
  • Gifts
  • Household miscellaneous items

We are talking about the random stuff you seem to always have at home but only notice them when you live in your own. Examples such as lightbulbs, cleaning supplies, toilet paper, etc.

This bucket is really anything that will vary from month to month – within reason of course.

spend

*The gym costs is due to a very long story that got me trapped in two gyms one-year commitment contracts.

After taking all of these buckets into account, this is how it all measures up to. 

Living at home costs: $1,872.04/month

Living out costs: $2,536.29/month

Clearly you would almost be saving $700/month by living at home  with my numbers. If your folks are letting you stay rent-free, the difference is even higher. However, as I will be going to work on my other post that will explain more of the tradeoff and intrinsic gain, you will need to decide on what that incremental savings is worth.

Falling off the Minimalism bandwagon

I’ve heard about Minimalism about two years ago just when I had graduated university and worked a bit. Because I started to make a bit of money and the freedom to buy the things I’ve always wanted, I went a bit out of control. It all started with me searching for ‘How to stop shopping’ to ‘Do I having a shopping addiction?”. I just knew at one point, I was accumulating too much stuff, spending too much, and not putting enough money towards to my student debt.

That’s when I stumbled across Minimalism. The notion of having enough was not foreign to me, having grown up in an immigrant household, but it was suddenly having the ability to call my own shots. This newfound financial freedom spun me out of control. If I didn’t keep every receipt and manually input it into my monthly budget sheet, I probably wouldn’t have been able to see exactly how much I was spending that could have gone towards my loan. Eventually I cut back on my unnecessary expenses such as food and clothes.

After paying my loan off, I wanted to continue the same lifestyle. Watching and listening to all these people on Youtube leading a zero waste, minimalist lifestyle, as well as the Netflix movie ‘Minimalism’ made me want to be part of that community. I was going after that feeling of being immune to advertising, the need to be happy with who I was and what I have. There was so much buzz surrounding it that it was hard to not be caught up in the decluttering frenzy.

But the clutter came back. Then I would declutter again. And on it goes. The cycle of feeling enough, and then not enough kept going. Work has been stressful and sometimes you need that quick fix of instant satisfaction with a register at the counter. You can listen to all these talks about minimalism, or cyclically declutter your stuff, but if you don’t actually believe in it, then you’re bound to continue in that vicious cycle.

There’s always more to acquire and want. The real power is recognizing that you don’t need it and being able to say ‘No’. This girl ain’t hoping off the bandwagon anytime soon.

March 2018: What did I buy.

*Side note: I decided to not call this a ‘No buy’ as I am I still purchasing things. Maybe Low Buy? Yeah, that doesn’t have the same ring to it. Will update with a new title when I have a better name for it.

March has been one of the most stressful seasons I have ever encountered. I am thinking on putting a number of things I can buy in a month (excluding transportation passes) but still continue with a no clothing buy.

I’m going to try my best to decrease the number of purchases in April as I am aiming to build a good savings buffer before moving out in the summer.

What did I buy:

  • Brunch with family
  • Coach Chelsea boots
  • Lunch x 5
  • Uniqlo blouse x 2
  • Salsa dance lessons

What did I not buy:

  • Vince Camuto blouse ($40)

What I did to pay off $28,300 worth of student loans in less than 2 years.

Thank you, OSAP, for my education. I don’t think I could ever pay you back.” – Broke, unemployed 22-year old me, fresh out of university.

Here is the magic formula:

1. Switch to a low to no interest loan

You will never pay your principle amount if you keep accumulating interest and you would end up paying even more than your initial loan amount. This is where compound interest DOES NOT work in your favour. I was fortunate enough to have family help me pay off OSAP first, and then I would pay the full amount back to them. Effectively, having a zero interest loan. Thanks fam.

2. Budget, budget, budget

Never go to war without a plan.” – Sun Tzu, The Art of War.

Joking. I don’t even know if the book said that. However, that does not change the point.

You are in this for the long run. Paying off your student debt is like a marathon where it requires patience, pacing, and a lot of stamina. It’ll be all motivating at the start like the first 2KM – 5KM, but afterwards, it is so easy to slip and fall to old habits, spending away what could be going towards your loan. Plan exactly where each dollar should go before every month, which leads me to my next point of execution…

3. Set an aggressive monthly minimum amount

My minimum amount was determined by calculating how long I want to realistically take to pay off this loan. (I.E Loan amount ÷ # of years ÷ 12 months) I averaged about $1,600 – $1,800 a month, depending on the month’s financial situation.

4. Decrease expenses

There are two parts to this: A) Reoccuring expenses and B) Other expenses.

A) These would be expenses that would repeat month over month. Living at home and commuting via public transit meant that I could save some money by paying a lower rent and transit rate. Then, I put the difference towards my loan.

B) Other expenses would consist of going out to eat, shopping for clothes, etc. I am guilty in this area where spent a bit more than I should. Going out with friends and clothes were weaknesses of mine. Looking back, there were many occasions that I said ‘yes’ to, but there were many more instances when I had to say ‘no’.

5. Little to no savings

Honestly, this is one of the dumber things that I did in order to dump more money into my loan. I only did this, because my landlords were my parents.

6. No vacations

Plain and simple. I have not traveled for leisure or gone on a vacation since graduating and started working at my first full-time job.

Stay-cations ALL THE WAY.

7. Delay major purchases

Sony Vaio & Samsung Galaxy SIII

My 6 year-old Sony Vaio and 7 year-old Samsung Galaxy SIII.

I staved off major purchases till I neared the end of my loan. Here, you see my 6-year old Sony VAIO laptop that kept blue screening and slow AF Galaxy SIII that constantly crashed, dropped calls and no longer connect to wifi, among a plethora of other issues. Despite these issues, I kept holding onto them, because my budget could not take the massive hit of new purchases.

And that’s it! The truth of the matter is, there is no magic solution to student debt.

Decrease spending, increase loan payment.

I admit that I could not have done it all on my own. I had help in terms of family giving me a lower rent rate, and giving me an interest free loan. This helped significantly. The rest was on my own when it came to planning and putting money aside to ensure that I was on track to pay everything off as quickly as I can.

Best of luck and I’ll see you on the other side!

Loan Payment #22

This post is to officially announce that I paid off my $28,300 loan on March 15, 2018!

FREEDOM never tasted so sweet.

I woke up exactly at 5AM to check my paycheck deposited in my bank account. Then, made the final transfer of $1,800.

In all honesty, I did not feel any different. It didn’t seem like as if I paid off everything. Instead, it was just like any other payment. I have a feeling that it will truly hit me in April when I can actually keep a large sum of money for the first time in two years.

No Buy – February 2018: What did I buy.

I put myself on a ‘No Buy’, for clothing or new tech, after setting a personal record in spending during the holiday season and noticed that I had spent a little over $3 000 on clothing over two years. It helped that work kept me in the office all February and out of stores.

To put it into perspective, that’s essentially two months worth of student loan payments. TWO MONTHS. I can’t even remember what I bought or how much I wore the items. Lesson here is, everything adds up and know your habits.

Clothing is my weakness. Back when I was younger, we would only have one shopping trip a year and that is because our grandfather wanted to treat us. My folks were (and still are) incredibly frugal as they came as immigrants with barely anything. So, now that I have disposable income, being able to buy clothing gives me a sense of freedom to do what I want and have what I want.

My ‘No Buy’ is not meant to deprive me of enjoying life but rather train healthy, financial habits. I like how I use to only buy clothes once a year, it made the purchasing that much more special. On the other hand, you can’t save as much money because certain items are cheaper during the end of certain seasons. In order to not pay ticket price and recreate the occasional purchasing trip, I have a list of pre-approved items:

  • Black Chelsea boots with 2-inch heel (specifically the Coach BOWERY boot) – $470
  • White blouse (Uniqlo) – $35
  • White flowy, button-down shirt (Uniqlo) – $35
  • Red dress (or any one-piece in that tone) – $100
  • Black blazer – $80
  • Black pair of jeans, solid, no-distressing (Levi’s) – $80
  • Merino Wool crew-neck, knit, sweaters x 2 – Uniqlo ($80)

Notice that most of them have a specific store assigned already. That’s from me doing research on what exactly I am looking for and prevents me from wandering off and seeing other things. These are all officewear as I have more than enough of ‘university/lounge-wear’ and not enough professional outfits. I identified that these should be the remaining pieces to have a well-rounded office wardrobe that I can wear many times over.

Finally, I think it would be really interesting to document what I wanted to buy and what I did end up buying this month.

What I bought:

  • Treated family to dinner
  • Reunion dinner with high school friends
  • A chicken soup because I felt sick that day
  • Tea x 2
  • Weekend Cottage/Snowboarding trip
  • Gift for Dad’s birthday

What I wanted to buy, but didn’t:

  • Gold chevron ring ($60.00)

Why I pay rent when living at home.

Yes, I pay rent when living at home and I think it is the right thing to do.

No, the money is not going back to me sometime in the future. My folks are not holding it for safe-keeping for me.

Two main reasons:

1. I am a working adult who has a job and I am using their space.

If I am contributing to the monthly utility bill, eating food, and utilizing a room that they could have rented out, I think it is only fair that I pay my share. My folks are paying for the monthly mortgage and groceries, so it is not like they are skipping out on paying their part of living expense.

2. Teaches me to live realistically.

Because I am paying rent already, my monthly expenditures already have a buffer for rent. If I were to move out, it would not be as much as a shock to my budget as not having paid it at all. I am use to living with a certain amount of disposable income after basic needs are accounted for.

All in all, there is a sense of pride of being independent and self-reliant because of my own finances.