In our Smart Money series, #MilliennialMoney, we ask people living in the Greater Toronto Area to record every penny they spend in a typical week. Then, using tips from a financial adviser, we challenge them to cut their spending the following week so they can save more money. Will they fail or succeed?
For Stacy, the goal at 29 is to “live like a celeb” while being able to balance her budget. The current obstacles? She’s still paying off $17,000 in debt for a student loan and line of credit. Not so glamorous. But she also wants to be able to save enough to go on a nine-month luxurious vacation.
As a PR manager working in downtown Toronto, she makes $72,000 a year — which she isn’t complaining about. But as a creature of habit with some “destructive” tendencies, meeting that mark is taking quite a while.
“Most of my challenges are habits and cycles, like alcohol and smoking and ordering food,” she says.
She has the best intentions to spend less money at the beginning of the week, but when a stressful workload piles up, she begins spending more and more to counter her stress. It’s a therapeutic release, which includes everything from after work drinks to grabbing Uber Eats the next day when she’s feeling “too hungover” to prep food and needs a quick fix.
Rent isn’t the problem. She spends $1,225 living in a Bloorcourt home with a roommate — a steal compared to some of her condo-living friends who pay more than $2,000 in monthly rent. She also knows that groceries are an important buy, but with her workload and desire to be out of the house during her downtime, most of her produce rots in the fridge.
We asked Stacy to monitor her spending for a week. Here’s how she did:
The expert: Jason Heath, managing director at Objective Financial Partners, reviewed Stacy’s spending and had this advice to offer:
- Stacy’s monthly cellphone costs are too high at $150 per month. She should consider a lower-cost provider or at least asking her existing provider how she can bring down her costs.
- Her unused gym membership is an easy expense to cut, and a reminder that people should consider those recurring expenses that are unnecessary when they review their bank and credit card statements.
- Stacy’s cigarette costs are costing her financially now and will cost her more in the future. Smoking has obvious implicit health costs, but also leads to higher costs for things like life and disability insurance.
- The spending on alcohol and Uber Eats also stick out. You pay a premium for going drinking with friends and for someone else to deliver your food. You have to live it up a bit once in a while, but if you’re actively looking to cut spending, delivery food and bar bills are definitely areas to consider.
Results: Success-ish! Spending in week 1: $385.25. Spending in week 2: $380.00.
What she thought: Despite the similarities in her weekly spend, Stacy thinks she actually did pretty well because she was on a work trip in New York City for the second week. It helped that she was able to expense some food and transportation items to her workplace, which definitely helped keep some extra cash from dining out and grabbing drinks in her wallet.
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Take-aways: Long-term goals for Stacy? Quit smoking and drink less. She recognizes that not only is it bad for her health, but recording these items have shown her that a good chunk of her earnings go into these categories. “It’s really difficult to break the habit, but seeing that spending on paper can be really enlightening.”
Also important? Finding a better way to meal-prep and use groceries without letting them rot in the fridge. “I have to show up in my kitchen once in a while,” Stacy adds.
She hopes that turning to smaller day-to-day solutions, like saying no to a cocktail on a weeknight, will help with paying off her debts in the long run. First, she’ll have to find another way to channel her stress in finding a therapeutic solution to her heavy workload — and she says she might give the gym another shot.
Are you a millennial living in Toronto or the GTA and need help with saving your money? Be a part of #MillennialMoney and email email@example.com
Digital design by Cameron Tulk.