For the average Canadian, housing is typically the largest line item in their monthly budget. There is a general rule of thumb that you should be spending 30% of your income on housing. Canadians are spending as much as 50%. My advice? Spend 20% or less. I also recommend spending a lot of time shopping around and weighing your options before you move.
The cost of housing in almost every major city in Canada is increasing year over year. Once you find the place for you, buy it or rent it. Yearly increases in rent and interest rates are lower than the increasing costs of the rent and mortgages themselves. The sooner you nail down a place, the better.
Once you have a spot, stay there as long as it fits your lifestyle. Avoiding cashing out only to be greeted with more expensive housing. This also helps eliminate moving costs, give you leverage when you renegotiate services, and more. Every time you move, you risk needing to swap out furniture, buy appliances, and spend money that you wouldn’t need to otherwise.
If you can live far below your means, you’ll have more money to save and more money to spend on things you want. If vault ceilings and stainless steel appliances truly make you happy, that’s okay too. For some, a quiet, comfortable place to lay your head it enough.
Are you overspending on housing? Do you have any housing tips?
If you plan on retiring early, like me, you have to have hobbies. They are part of your retirement ecosystem. Myself, I enjoy photography, an expensive hobby that I’m not very good at. I especially enjoy photos from my travels. Fortunately, these hobbies work out perfectly for a blogger!
An added bonus of writing this blog, is a need for content. I enjoy getting out and shooting photos but I can get lazy and spend too much time on other things. Now I NEED to go out and snag a few photos a week, which has helped self regulate my photography sessions. I always enjoy the sessions and find that self managing myself in this way is super useful. Kill two birds with one stone.
Finding a way to build your hobbies into your life before retirement will help you plan better. You may not enjoy a hobby after a while, you might take it really seriously. Knowing what you like before retirement will help you plan ahead. You can’t always be sure, but it’s vital to try!
Hopefully I’ll continue to enjoy my hobbies, and maybe even profit from them one day. You never know!
There are a million and one talking points on budget optimization, but I found a metric that works really well for me. When you’re travelling, you often look at what day-to-day costs are for your trip, because it is typically measured in days. When you live somewhere, you usually look at it in months, because that’s how bills are paid.
I’m challenging you to look at what your current life costs you per day, it should give you a unique perspective. Until recently, living in Toronto costs me about $48/day. I think that’s pretty high, so I found ways to get that down to $45, and hopefully I’ll have it below $40 in the next 6 months by moving.
Look at all of your required expenses, and determine if you can reduce or eliminate any of them WITHOUT giving up anything you love. Myself, I dropped a couple domain names I haven’t used in over a year, got rid of my gym membership, reduced my meat and cheese consumption, and stopped buying lotto tickets. This got me to my goal. $3/day seems trivial, but that’s over $1000/year!
Try slimming down, you’ll feel better!