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Name, age: Alison, 27
Annual income: $62,000
Debt: $0
Savings: $6,000 in emergency fund; $7,000 in trip fund; $1,500 in high-interest savings account; $20,000 in tax-free savings account; $27,000 in registered retirement savings plan
What she does: administrative assistant at a financial firm
Where she lives: Toronto
Top financial concern: “I prioritize having a good cushion in my bank account – I focus on long-term savings. Two years ago, there had been an objective to maybe save for a down payment for a home, but that’s not on the table any more.”
Alison spent her childhood watching as her parents struggled to earn enough to ensure a financially stable childhood for her and her sister. “They were entrepreneurs and that came with infrequent income and unsteady paycheques,” she says.
Although her parents got secure, well-paying jobs when she reached her teens, Alison was left with an aversion to risk and anxiety around finances. “I was terrified of credit-card debt and remortgaging anything,” she says. “My solution is to overplan and overthink everything. I am rigorous with my budget spreadsheet and every month everything is put into its own account.”
It also changed her career plans. Although Alison graduated in 2017 from Queen’s University with a degree in history and art history, followed by a degree in arts administration from Humber College in 2018, her time as an arts administrator was short-lived. “You wake up to the salary prospects in the not-for-profit sector,” she says.
So Alison changed gears. Three years ago, she began working for a financial firm, which pays her a base salary of $52,000 plus $10,000 in bonuses. That allowed her to pay off $10,000 in provincial student debt in 10 months in 2020. She’s currently working toward a certified financial planner designation. “I’d like to focus on the financial planning side,” she says.
She’s also committed to saving with her fiancé, who has a high-paying job in sales. While they planned to buy property and were able to save a lot of money at the onset of the pandemic, COVID-19 and its impact on Toronto’s surging real estate market changed their plans. “Two years ago, there had been an objective to maybe save for a down payment for a home, but that’s not on the table any more,” she says.
Instead, they plan to continue renting a downtown one-bedroom condo, for which they collectively pay $2,465 a month, plus utilities. “We enjoy our apartment and our lifestyle here,” she says. The couple eat out infrequently and cook largely vegetarian meals. And they use their building’s gym to work out for free.
To prepare for her 2023 nuptials, she’s building a wedding fund, which is sitting at $2,000. And she’s saving aggressively for her retirement, having amassed $27,000 in an RRSP. She also contributes $350 monthly to a TFSA.
In the short-term, she is planning an Italian getaway this summer, for which she’s budgeted $10,000. “Friends are getting married at the end of June – we’ll visit Venice, Verona and Bologna. We’re foodies so it will be fun,” she says. “We have savings set aside for it.”
Her typical monthly expenses:
Investments & savings = $850
$500 to RRSP: Her employer matches her contributions, which are held in an RRSP offered by the investment firm. “With the help of the matching program I maxed out my RRSP for the first time in 2021.”
$350 to TFSA
Household & transportation = $1,330
$985 on rent. “I split the rent ($2,465) 60/40 with my fiancé for a one-bedroom condo” near Yonge and Bloor.
$100 on parking space. “I don’t drive. I pay for a portion of parking. My fiancé has a 2012 Honda Civic.”
$145 on transit. “Before lockdown, I had a monthly TTC pass. Now I set the money aside and load my Presto card with $50 as necessary.”
$100 on utilities. “Our utilities are pretty manageable.”
$0 on Internet. “It’s expensed by my employer.”
$0 on cellphone. “It’s $100 a month, but expensed by my employer.”
Food & drink = $610
$200 on groceries. “We fortunately live beside a No Frills. We largely eat vegetables to keep costs down – curries, quinoa salad, soups.”
$300 on eating out. “We often eat meat when we eat out. We’ll order burgers, go to Maison Selby, sushi or Italian food.”
$100 on alcohol. “We’re big into red wine. During the pandemic we started stocking up our bar cart.”
$10 on coffee/tea. “I love coffee but I almost always make it at home.”
Miscellaneous = $508
$250 on wedding fund. “We got engaged in December. The wedding is set for 2023. I have $2,000 saved.”
$21 on Netflix. “I pay for one account shared between my parents and in-laws. I’m shamefully rewatching Downton Abbey and the Formula 1 documentary, Drive to Survive.”
$12 on apps. “I have Spotify.”
$200 on clothing, largely from Poshmark.ca, a social commerce marketplace. “I have an unhealthy obsession with it. I bought work clothing from Aritzia on Poshmark for a fraction of the cost and a really nice tote bag from Madewell. I got to the point where I deleted the app.”
$25 on charitable donations. “It was the Canada-Ukraine Foundation this month.”
TOTAL = $3,298
Annual expenses
$200 on renter’s insurance
$120 on hobbies. “I spent $120 on an AGO membership.”
$250 on sports. “I’m enrolled in co-ed soccer at Polson Pier right now.”
$400 on haircuts/cosmetics. “I go every three months for a haircut to Civello.”
$500 on vacations quarterly. “We’re at $7,000 in our vacation fund. We’re going on an Italian vacation in the summer – two weeks are planned in Venice, Verona and Bologna. We’ll pay for it in cash.”
TOTAL = $2,970
Some details may be changed to protect the privacy of the person profiled. We want to thank her for sharing her story.
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