[Saniokca]

So, I am 25, graduated a year ago working full time since. I live with my parents. This gravy train will end in January when I will be moving in with my girlfriend.

Major achievements: paid about $30k of university debt (OSAP+LOC)
Salary: $65k + bonuses (i.e. around $2k twice a month after taxes)

Monthly liabilities:
car: $660 (financing 2.9%/y ends in feb 2013)
insurance: $250
minor debt: $150 (0% ends july 2010)
commute: $160
TOTAL: $1,220

Assets:
TFSA: $1,500
RRSP: $0
10% emergency: $9,000 (Savings acct, to be deposited to RRSP soon)


TFSA Target: $5,000
RRSP Room: $13,600
10% target: $10,000

I am trying to put away around $2.5k a month and fill up my TFSA and RRSP. In 2009 I should I accumulate about 12k more in RRSP. I want to fill this up so I can use the 25k for the "first home buyer". The TFSA is mainly for my boat when I retire (joking). My main obstacle is eating (drinking) out and vacations (for two).

As it stands right now I will be 10k short. I hope to make that up with my bonuses/raises next year.

September: deposited $2,100 - however I will be lucky to get $200 from the second paycheque since my visa is already at $600 (all monthly expenses are paid with the second paycheque each month).

I will update this 1-2 times per month. Any suggestions/comments will be nice.

 

[Ben]

I'll start by saying you won't regret paying off that student debt. I paid off the same amount in the same time, and it's the best financial move I ever made.

 

[Rickson9]

A good start! This brings back memories...

 

[Saniokca]

So, September was a pretty bad month...

Visa is about $1,100 and a big portion of it was on eating out and alcohol... (A friend came from overseas and we went out almost every day)

Consequently, this means no more contributions for Setember. Furthermore, October's contributions budget is now at $2,000 (conservative-hopefully I can get it to $2,200).

Hopefully October will go better...

 

[tom_ford]

Wow, you got your finances under control. Pretty admirable for a 25-year-old unmarried guy.

 

[Saniokca]

Wow, you got your finances under control. Pretty admirable for a 25-year-old unmarried guy.

Haha thanks Tom! I won't be unmarried for too long though

Regarding October... Did not go well in terms of my savings but it was worth it... Booked a cottage for Christmas with another couple... Went out a few times... Oh well I need to live for today too.

So, September and October contributions combined are $3,500. Well short of the $5,000 originally planned but I think the shortfall was well spent.

TFSA is full.

Let's see how "bad" December will be. I'll be lucky if I'll have 1k to save.

 

[tom_ford]

Well, you also need to live and enjoy your life. Being too busy being frugal and conscious of our expenses takes away our ability to enjoy life sometimes. It's good to spend on getaways and vacations every once in a while. Reward yourself for being responsible and all.

 

[specialk]

Looks like your kicking butt. Just a thought though, if it were me, I would use a bit of your cash for an older car and sell that one and have another 660 per month for your investing situation. Obviously, in your case this isn't an urgency though. Either that, or maybe be more aggressive about paying it down within 2 years instead of the 3 ish? If my math is right, it looks like you have about 23,000 or so left to pay on it, is that right?

 

[Saniokca]

Looks like your kicking butt. Just a thought though, if it were me, I would use a bit of your cash for an older car and sell that one and have another 660 per month for your investing situation. Obviously, in your case this isn't an urgency though. Either that, or maybe be more aggressive about paying it down within 2 years instead of the 3 ish? If my math is right, it looks like you have about 23,000 or so left to pay on it, is that right?

You're pretty close - it's 24k. Don't really want to give it up lol. I was debating about paying it off sooner but I decided that and emergency fund is worth the price (2.9% that I'm paying for the car loan).

No more savings in 2009... Bought new tires for $900

Time to sum up May2008 - Dec2009:
Paid off school debt ~ 30k
$10,000 in emergency money (will go to RRSP in February)
$5,000 in TFSA
Total Savings = $45,000

Big ticket Luxuries:
Raptors season seats (last season) - $2,000 + countless bar visits with my buddy before the game
Laptop = $1,700
Trip to London = $1,000 (cheap flight & stayed at friend's place)
Car = $30,000 (660/month)
Insurance = $3,000 (250/month - first car, never had insurance before)
Cottage for Christmas = 600
Winter tires = 900
Total Luxuries = Don't want to count

I would say I had a decent year and a half. My biggest regrets are: too much bar food, too many bar drinks, too much junk food.

 

[Addy]

Congratulations, good for you!! One thing to mention, if you're not planning to be unmarried for long, I hope you know where your potential fiance's stance is regarding saving and investing.... I am thankful my husband and I think similiarly because if we didn't then our relationship would be awkward to put it nicely!

 

[Saniokca]

Ok, posting once a month was a lot easier when I knew what is going on with the finances. Since my last post a lot has happened and although I was constantly in control of the finances it is too hard to analyze it here.

1) My girlfriend finished university and started working ($50k pre tax).
2) We moved into a 1+den condo (renting - $1400 per month plus heat and hydro costs). This might seem a bit high we only had a week to find a place and this is the best price we found for our demands (We could have saved about $200/month but this place is worth the money). We could also live at my parents' place for a month but it would be quite difficult and uncomfortable (again well worth the money).

Since we had nothing at all, we had to spend a big chunk of money in the first 3 months (I include March because we are still making some purchases.
We (I guess I...) decided that it would be fair to share expenses according to how much each of us makes (base salaries) and the ratio ended up as 57% to 43%. My rainy day fund and some of the TFSA came in very handy since there is no way we would be able to buy so much without going into debt.

Summary as of March 21, 2010:
TFSA = $1,500 (contributions) + some investment income
RRSP = $10,000 (contributions) + some investment income
ring/rainy day fund = $6,600 - need to bring it up to around 10k and then hope for a "yes" .

Monthly expenses (shared):
Rent - 1,410
Car - 660 (2.9% - last payment on Feb 1, 2013) - seems so far away...
Insurance (car+rent) - 280
Utilities = $150/m

A minor expense of $150/m expires in July (it is a no interest loan so there is no point in paying it early)

Contribution goals for this year:
ring - 3,400
RRSP - $10,000
TFSA - $5000
$3000 in Rainy day (since it will be depleted as soon as it reaches 10k).

This will be quite hard to achieve but I have big hopes on bonuses and raises this year. I am an actuarial student and every exam I pass comes with a nice bonus and a raise. If all goes well, I should get $7,500 in bonuses and $11,000 in raises this year (pre tax).

To answer Addy's question: My girlfriend is definetly less of a saver and more of a spender than me. During the past 4 years we learned to resolve financial arguments almost peacefully... . The past three months were a very good test for us and we did well. There were disagreements here and there but it was mostly on the timing of the purchases.

I hope that somebody finds the above at least a somewhat interesting. Let me know what you guys think.

 

[the-royal-mail]

Interesting profile, san. Here are my comments:

1. I am concerned with lumping in the ring (good luck!) and rainy day savings into one account. $3K is nowhere near sufficient for rainy day funds. They say the average person should have cash on hand to pay all of their expenses for 6-12 months with NO income. IMO your rainy day fund should be the immediate goal and kept to no less than $10K cash. And once you have it, it is not to be raided for anything other than an emergency. Doing this, gives you the maximum self-reliancy. And in your case you are expecting some bonuses. SO what I would do FIRST is move the money from those bonuses to a cash rainy day fund, stick it in to your TFSA, and THEN save for the ring and the RRSPs. In my opinion. I realize some may disagree.

2. Not to get off topic, but I am curious about how you resolved your financial arguments with your gf. I haven't seen too many people succeed at this as old habits die hard. This was a serious issue with my last gf and it became clear fairly early on that her poor financial habits were staying with her. In a couple, this can sink the financial ship!

 

[Saniokca]

Interesting profile, san. Here are my comments:

1. I am concerned with lumping in the ring (good luck!) and rainy day savings into one account. $3K is nowhere near sufficient for rainy day funds. They say the average person should have cash on hand to pay all of their expenses for 6-12 months with NO income. IMO your rainy day fund should be the immediate goal and kept to no less than $10K cash. And once you have it, it is not to be raided for anything other than an emergency. Doing this, gives you the maximum self-reliancy. And in your case you are expecting some bonuses. SO what I would do FIRST is move the money from those bonuses to a cash rainy day fund, stick it in to your TFSA, and THEN save for the ring and the RRSPs. In my opinion. I realize some may disagree.

2. Not to get off topic, but I am curious about how you resolved your financial arguments with your gf. I haven't seen too many people succeed at this as old habits die hard. This was a serious issue with my last gf and it became clear fairly early on that her poor financial habits were staying with her. In a couple, this can sink the financial ship!

Thanks for the reply.

1) I agree that the emergency fund should come first (before RRSP/TFSA). And in a way it will. As I did last year, I will keep the money intended for RRSP in the 10% fund until February 2011. Then I will transfer 10k to RRSP and the rest will stay in the emergency fund. My plan is to fund the RRSP with 20k total contributions (when I decide to get a house I will top it up to 25k). After all this I will concentrate on TFSA. The ideal situation by the end of 2010 would be to have 25k in RRSP, 10k in TFSA and 10k in Emergency money. But this is unachievable due to my love to life

2) For better and for worse, I look after the financial aspects in our relationship. This will change in due time because it`s not very prudent (i.e. if something happens to me she needs to know how to take care of all this). I got off topic. The money topic is a sensitive one - of course we argue sometimes but it`s not major and we try to resolve it on the spot. We decided on a way to split expenses. Everything else is not my business. Not yet at least. We also have a plan on how she will tackle student debt (around 20k). The good thing is that she helps me to enjoy life now and I help her to think about tomorrow.

 

[andrewf]

Interesting profile, san. Here are my comments:

1. I am concerned with lumping in the ring (good luck!) and rainy day savings into one account. $3K is nowhere near sufficient for rainy day funds. They say the average person should have cash on hand to pay all of their expenses for 6-12 months with NO income. IMO your rainy day fund should be the immediate goal and kept to no less than $10K cash. And once you have it, it is not to be raided for anything other than an emergency. Doing this, gives you the maximum self-reliancy. And in your case you are expecting some bonuses. SO what I would do FIRST is move the money from those bonuses to a cash rainy day fund, stick it in to your TFSA, and THEN save for the ring and the RRSPs. In my opinion. I realize some may disagree.

2. Not to get off topic, but I am curious about how you resolved your financial arguments with your gf. I haven't seen too many people succeed at this as old habits die hard. This was a serious issue with my last gf and it became clear fairly early on that her poor financial habits were staying with her. In a couple, this can sink the financial ship!

I don't think it makes sense to have 6-12 months in cash just idle in a savings account. It's liquid enough in a TFSA or even a LOC.

 

[the-royal-mail]

I don't think it makes sense to have 6-12 months in cash just idle in a savings account. It's liquid enough in a TFSA or even a LOC.

I agree about the TFSA but do not agree that RRSP's (as mentioned above) and LOC constitute rainy day savings. Relying on credit to get you through rough periods in life is a TERRIBLE idea. How many more threads do we need to read about people who need to spend hundreds of dollars a month paying off debt?

(RRSP's are for retirement, not for rainy days)

Relying on credit to solve all of our problems is why so many people are in financial dire straits today.

 

[andrewf]

I don't know. Think of the foregone return on your rainy day fund as the 'cost' of that just in case. I'd much rather take the chance I'd have to pay a month or two of interest of a LOC until I could raise some cash rather than leave $20,000 sitting unproductively in my savings account 100% of the time. If you're giving up 5% return (spread on 'risky' savings vs. a savings account), that's $1,000 per year, which is a pretty costly security blanket.

 

[ashby corner]

660

I'd be curious as to what a 25 year old dude drives for 660 a month. That seems like a WHOLE lot of car (unless it was a 2 year loan or something).

 

[72camaross]

Wow this a good thread Saniokca! I just turned 25 this year so I'm about a year behind you. I wish I could put that much on my student loan in that amount of time! How did you do it? and still enjoy the raps.

I'm also jealous of the RRSP and TFSA money you are putting away! Good work, I only hope I can do half as well as you are!

I also am curious about the car haha

JD

 

[Saniokca]

I'm back...

SO, my last post was about six months ago when I said it will be about once a month... Nevertheless I am back with an update. Forgive me for this post will be messy.

Summary as of Oct 12, 2010:
TFSA = $500 (contributions)
RRSP = $10,000 (contributions) + some investment income
Rainy Day fund = 1000
Line of credit = $10,000

Monthly expenses (shared):
Rent - 1,410
Car - 660 (2.9% - last payment on Feb 1, 2013) - seems so far away...
Insurance (car+rent) - 280
Utilities = $150/m

Where did my money go you ask:
20k for the ring (I know I will get slaughtered for this so fire away)
two vacations (Spain and Israel) - $12,000 (shared) - Again, slaughter away.

After a tough start of year my sense of entitlement (worked hard through university and paid off debt very quickly) got the better of me and as you can see above I overspent. It's not too bad since I buckled down again and we plan 3 very cheap (no more than 4k for all 3) vacations next year:
1) Cuba;
2) South Carolina with her parents;
3) Ski trip with parents or friends.

Goal is to get rid of the 10k LOC by February the latest. This should be very easy since I have approx 2k of unused income every month + exam and yearend bonuses. Then max out my TFSA in 2011 (~15k room). The TFSA will be my emergency money until 2012.

We also started a wedding/honeymoon (2012) fund with $500/month contributions.

Oh yes the car is a VW rabbit 2009 (bought new financed over 4 years). Plan to buy next car somewhere around 2018.

 

[the-royal-mail]

san, please look past the tone of my comments and read my words very carefully.

At the end of the day, none of us here can tell you what to do. The choices - and the consequences are ultimately yours. But I am disappointed that you ask us for advice, we provide it, you disregard, acknowledge that you know that your past actions (trips and ring, which happened after the advice we gave) were not the best decisions and then proceed to boldly plan and repeat these same financial mistakes again for next year. Three vacations in one year? Brand new car. $10K in debt.

Am I reading this right?