Abigail, 29, makes $45,000 as a retail manager. She is looking to rent an apartment under $1,500 and wants to get her master’s degree, but has no savings. What can she do?

Millennial Money is a weekly submission-based series that provides financial advice to millennials in the GTA. Read the full series here.

At 29, Abigail, who lives at home with her parents in Vaughan, is contemplating a huge move in her life. “I want to move closer to work, even if it is a basement apartment or a room for rent, so I can save on transportation costs and time,” she said.

Currently, she makes $45,000 a year working as a manager of a small retail store in downtown Toronto. “We’re only doing online orders but I am there packaging goods every day.” Some days, she takes public transit, while other days she drives a car that she’s owned for quite some time. That adds up to around $300 a month, she says.

She’s saving up to eventually get her master’s degree, but only recently finished paying off her student debt from her bachelor’s degree. “I worked two jobs during school to make that happen and I’m happy the debt is paid off, but it feels like I’m planning for another big whirlwind.”

In the desperate search for a new spot, she’s been looking for places to rent under $1,500. “It would be nice to be along the Yonge Street (subway) line, even just at Finch,” she said.

But taking home less than $3,000 a month, she has no idea how to afford a place while keeping up with other expenses in her life, such as massages and acupuncture, which she requires after a sports-related injury in university.

Her saving grace for now is that she continues to save on food costs because she’s eating at home. “My other normal expenses, other than massages, are occasional groceries to help the family, cannabis, and a coffee here and there.”

Right now, time is of the essence, she says. “If I can cut car costs, that would be amazing, and just walk or commute to work. That would save me about $150 a month,” she said, adding she realizes that the rest will go into rent.

We asked Abigail to share a week of daily expenses to get an idea.

The expert: Jason Heath, managing director at Objective Financial Partners Inc., on Abigail’s situation:

Commuting to work can be a real drain, not only on your time but on your bank account. I can appreciate Abigail’s desire to move downtown and be closer to work. However, it seems like if she makes the move, she’ll be shelling out over half her paycheque in monthly rent.

Whether you’re renting or buying a home, rules of thumb about housing costs as a percentage of your income are helpful, but it’s more important to consider your personal situation.

In Abigail’s case, she wants to do a master’s degree and needs to save up, and that schooling may also impact her ability to work and her level of income. She also spends about 20 per cent of her after-tax income on massage, acupuncture and therapy.

Education and health are both expenses that can be considered an investment in yourself. But if I was Abigail, I’d reconsider spending half my income on rent given these other significant costs. There’s not much left over.

She works in retail and that sector has been significantly impacted in the past year. If the main reason she is moving is to be closer to her current job, what happens if something happens to that store or her job?



She may be able to cut her commuting costs and keep her expenses low for a little while longer by finding a job closer to her parents’ house. If she really wants to move out on her own instead of living with her family, maybe she could find a job in an area where rent is cheaper.

If she does move out, she should consider some of the extra costs that she is sure to incur in an apartment. Costs for food and household supplies do not appear to be part of her current budget, other than occasional groceries.

She has an old car that she may not need as much if she lives along the subway line, but she may have increases in her monthly spending for parking costs or higher car insurance premiums by moving from the suburbs to the city. She may also need to anticipate upcoming car repairs or even a car replacement given her car is older. If she can ditch her car and rely on public transportation entirely, that could help her balance her budget better, but may cause her rent to rise if she has to move closer to downtown to not need her car.

Abigail has no debt and worked two jobs to pay off her undergraduate degree, so she’s obviously a hard worker who can do what it takes to make her move and pay for her master’s degree. But I’d prioritize if the most important thing is to be closer to her current job, to be on her own, or to keep costs low to pay for her education. That may cause her to reconsider her job, the area where she might rent, or even moving out at all right now.

The results: She spent a bit less. Spending week 1: $202 Spending week 2: $190

How she thinks she did: “My weekly costs are very low,” Abigail said. After buying groceries to help the family, there isn’t much she’ll spend on “extra” buys, other than a $2 coffee occasionally. “But it’s the larger costs that happen monthly — the acupuncture, the massages, the cars — that stack up.”

Take-aways: She knows that the 20 per cent she puts in massage and acupuncture eats at her costs if she plans to move out.

“I’ve been getting better, which I hope means I can prolong the time between sessions to knock that number down to 10 per cent,” while still listening to her body, she said.

For Abigail, it was also good to see all the circumstances around her moving scenario.

“Things need to fit together like a puzzle to work out,” she said. She’s hoping that there will be a spot, even if it is just a room, closer to her retail work, where she can walk daily and cut out the $395 monthly expenses for transportation. If not, she’ll remain at home. “I just need to make sure that I can save more to achieve my goal of going back to school.”

Finally, though Abigail loves working as a manager at the store, she realizes that for now she may need to consider finding a job closer to home.

“I’m going to weigh these options, and hope I find some clarity!”

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