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Name, age: Diana, 39
Annual income: $81,500
Debt: $0
Savings: $3,300 in savings account, $2,000 in tax-free savings account
What she does: Manager of business development
Where she lives: Hamilton
Top financial concern: “I’m starting to save at a later date with a shorter runway, but I guess there’s nothing I can do but maximize the time I have left.”
Diana is at a financial turning point. Last month she finished paying off a consumer proposal, a type of insolvency filing in which you repay a portion of your debt without having to file for bankruptcy. In her case, the legal arrangement reduced her initial debt of $63,000 to $23,000, which she hustled to pay back over eight months.
The debt came from a few years of “irregular employment” while she finished a master’s degree. Now she’s got her new credentials, a stable job and a partner with whom she lives and shares expenses. And she’s debt-free.
“It’s a very empowering feeling to not have that debt,” Diana says, crediting her partner for encouraging her to pursue the consumer proposal. “I was frozen.”
Mary, 29, is thankful that her mom forced her to pay off her student loan immediately
In her first month without debt, Diana plans to continue saving aggressively. Her new goal is to save for a down payment on a house with her partner.
“My first goal is to reach the minimum I need in my chequing account to rebate the bank fee, which is $4,000. When I have that cushion, I plan to start transferring the monthly savings amount to [a first-home savings account] until it’s maxed out each year,” she says.
The couple expects to have enough of a down payment by next year for, ideally, a duplex in the Niagara Region that would give them some rental income. It’s possible that lenders may not agree to give Diana a mortgage just one year after completing a consumer proposal, she says, but if that happens, they’ll keep saving and try again.
“If it takes another year, we’ll have a bigger down payment,” she says.
As a first-generation immigrant – Diana moved to Canada from Eastern Europe as a kid after the fall of the Soviet Union – she says her parents came here for a better life, so she’s happy to finally feel like she’s on that path.
She worries about how much she’ll have for retirement but is comforted by how much change she’s already made.
“I’m one of those elder millennials that was told all my life that I should start saving as soon as you can,” she says. “But you can only control right now, so you might as well be responsible rather than complain about missed time.”
Her typical monthly expenses:
Investment and savings: $1,700
$1,700 to savings
Servicing debt: $0
Household and transportation: $1,202
$740 to rent. “I moved in with my boyfriend in January, and he pays the majority.”
$60 to gasoline
$100 to car insurance
$217 to car maintenance. “A 2011 Ford Focus.”
$85 to cellphone
Food and drink: $1,420
$1,300 to groceries. “I love to cook. We don’t eat a ton of meat, but I’ll get the good stuff.”
$20 at coffee shops. “I try not to do this very often.”
$100 at restaurants. “About two visits per month.”
Miscellaneous: $2,352
$1,600 to paycheque deductions
$60 to cannabis. “I like to smoke weed. It’s a total indulgence.”
$11 to streaming services. “CBC Gem and Amazon Prime.”
$30 to other apps. “Spotify and YouTube.”
$100 on clothing
$80 on gym membership
$30 on dog food
$83 on gardening supplies and plants. “I’d rather decorate with plants than painting the walls.”
$56 at hair stylist. “Cut once a year, colour two times a year.”
$8 to cosmetics
$120 on nails. “I love a gel manicure.”
$16 on dentist. “I had to pay for teeth cleaning until my dental benefits kicked in.”
$33 for glasses. “I need new glasses, so I’m budgeting about $600. Benefits pays $200.”
$83 for vacations. “Two road trips this year.”
$42 on gifts
Some details may be changed to protect the privacy of the person profiled. We want to thank them for sharing their story. Are you a millennial who would like to participate in a paycheque profile? Send us an e-mail.
