Millennial Money is a weekly submission-based series that provides financial advice to millennials in the GTA. Read the full series here.
For 33-year-old Ida, this pandemic year has been a complete whirlwind. First she was permanently laid off from her job as a designer, then she survived off CERB, and now she’s receiving $1,800 a month in EI. She’s also been able to get a few small gigs to earn a little extra money.
“I’ve done freelance design projects here and there but this last month, I haven’t gotten much work,” she said, pointing to the fact that outside of pandemic times there would be more demand. “It’s a grind every day to finish the project and start looking again, especially in a market like Toronto.”
For the lifelong Torontonian, now living with her parents in the Stockyards area, it’s time to think about a drastic life change. “I am thinking of moving to Quebec where housing is cheaper, and I can be independent” while feeling financially responsible, she said.
She was renting a one-bedroom condo for $1,500 — considered a steal in Toronto — but since summer 2020 has mostly been back home. “It’s been vacant and I can’t find anyone to fill that gap and because it’s a steal I don’t know if I should give it up,” she said. “Seems like we all moved home for security.”
That security includes meals and shelter, something she feels fortunate to have. “I’m eating all meals at home. Twice a month I’ll go hang out at a friend’s backyard in midtown and buy wine, fruit and order food, now that the weather is better. It keeps me mentally sane,” she said.
Before considering moving to a new province, Ida has to go through a procedure which may take time to heal from and has post-operative costs involving medicine and therapy. Besides that, she has $5,000 outstanding on her credit card but has been “preoccupied with other things.”
“What I feel is more wasteful is that I still have an apartment downtown for $1,500 a month which I haven’t lived in for months. Do I give it up? Toronto and the pandemic have made me re-evaluate a lot.”
We asked Ida to share her daily spending to get an idea of her finances.
The expert: Jason Heath, managing director at Objective Financial Partners Inc., had this to say about Ida’s goals.
Like many freelancers, Ida’s income has taken a hit over the past year. She is lucky to have cut costs by moving back in with her parents, but she has an apartment that she is still paying for in the city. A lease may allow a renter to sublet their rental in a case like hers, but presumably Ida’s lease is close to renewal, and it seems she is considering a potential move anyway at this point.
I can understand Ida’s motivation to consider a move. The unemployment rate in Quebec is 6.4 per cent compared to 9.2 per cent in Ontario. Taxes payable on $50,000 of income are over $2,300 less in Quebec and on $75,000, almost $4,200 less. Rentals.ca reports average rent in Montreal at only $1,399 for a one-bedroom in March, compared to $1,808 in Toronto. Numbeo reports consumer prices are 8.4 per cent less in Montreal excluding rent.
If I were Ida, I would find a way to cut the apartment expense and put that $1,500 a month toward repaying her $5,000 in debt. If she can get that out of the way, it will make it easier to move out of her parents’ house, whether to a place in Toronto or to Quebec.
The result: She spent more. Spending in week 1: $179 Spending in week 2: $216
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How she thinks she did: Due to the nicer weather, Ida says she went to hang out with her friends outdoors, which meant spending a bit more. “Usually I go downtown twice a month to see friends, but it’s been so nice and I need to get out of the house,” she said.
Seeing her monthly take-home pay and that she’s only really able to save a couple hundred dollars, she wants to be more mindful of her purchases.
Take-aways: “It’s a relief to see that the thought of moving to Quebec isn’t too crazy!” Ida said. She adds that friends and family have been trying to dissuade her from making “rash” decisions and to wait until after the pandemic. “With things changing it never seems to be over!”
It’s also good to see the numbers align more with Ida’s budget and job prospects. “It is so difficult to find something stable in Ontario. Though the rent may be similar, everything else seems more feasible.”
Now, she is hoping to find a way to end her contract for her condo in Toronto, just as Heath had mentioned, to put toward paying off her debt before her surgery.
“He made a good point to get everything cleared out before I undergo that procedure,” she said. “I don’t want additional stress while recovering and looking for jobs.”
