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After completing design school, unable to find a job and work in concerts for the past decade, the 31-year-old Weng is determined to finally pursue a career as a designer.
Due to a competitive job market, Weng struggled to find a stable career as a designer living in Barrie. She did freelance jobs here and there to build her portfolio, but eventually decided to go part-time.
Between making minimum wage as a waitress and her freelance work, she makes about $ 45,000 between the two of them. “I’m in my 30s and a little embarrassed that I didn’t build my portfolio to be a full-time designer,” she said.
He adds that he also faces a student debt of $ 15,000 and a credit card debt of $ 3,000, which with his low income is difficult to pay.
“Fortunately, I live at home with my parents and have been my whole life,” Weng said. “If I had to pay the housing costs, I don’t know what I would do.”
When the pandemic struck, Weng, like many other service industry workers, was laid off. “That’s when my credit card debt started to pile up,” he said.
When the province reopened, she returned to work as a waitress, but had spent more than a year planning her move to become a designer. Now, he’s focused on making ends meet to build a better design portfolio and find a full-time job.
“Working on creativity … this is the challenge for many,” he said.
Weng serves three to four times a week and receives a 50 percent offer on meals cooked at his restaurant, which works out to about $ 5 to $ 7 per meal.
“I also try to eat at home before my night shift, but sometimes when I arrive at midnight, I ask for UberEats,” he said. On days off, she’ll likely do freelance work where she can eat at home, though she admits she goes out once or twice a week for drinks with friends.
So what are your savings goals? First it’s to pay off his student debt, which has “gnawed” at his finances for years, and then the $ 3,000 on his credit card as he works to transition from service to design. Also, since he has always lived with his parents, he wonders how he can save to move.
“I want to eventually move out of my parents’ house and rent a place with a roommate or roommates closer to Toronto,” he said.
We asked Weng to share a week of spending to get a better idea of his finances.
The expert: Jason Heath, Managing Director of Objective Financial Partners Inc., on the Weng situation.
The slow start to Weng’s design career has certainly been a financial challenge. I speak to many young people in my industry who need three years of experience to become certified financial planners, but who cannot be hired if they are not already CFPs. It’s one of the reasons not to rush to move or buy a car or incur other big costs too soon. Some people are lucky right out of school, and for others, it may take longer, or more education or training may be needed.
Weng lives at home and that has helped her pay off her student debt a bit, but she acknowledges that it has been haunting her and that the payment has been slow. I think it should probably be your priority over investment. Their income is low, so contributions to the RRSP are not as beneficial due to the low tax rate. Although you could contribute to a TFSA, paying off your debt and avoiding interest gives you a reasonable and guaranteed rate of return. Your credit card debt should be your number one priority, as it certainly carries a higher interest rate than your OSAP debt.
I find that your car payments of $ 600 and your total monthly car cost of $ 1,040 are roughly 40 percent of your after-tax income. There’s not much left to pay off debt and save, let alone pay rent if you move. The problem is, you live in Barrie and you need a car to get around town and drive to work. Public transportation in the suburbs may not be enough, but the cost of owning a car can cut your budget considerably. The trade-off of living in a city like Toronto is that rents are higher, but you may be able to live close to work and do without a car, especially if you have plenty of ride-sharing options.
I worked part-time on Saturdays for several years after going to college, and it definitely helped me get to 30 in a better place financially. You sacrifice your free time, but often the financial sacrifices you make when you’re young won’t pay off until many years later. Your older self will thank you. There is no quick way out of debt, so the little things Weng can do to lower costs and increase your debt repayment rate will help. You should try to increase your monthly debt payments and do your best to get to a point where your credit card is paid monthly instead of keeping a balance.
The results: Spent a little less. Spending in week 1: $ 277 Spending in week 2: $ 264
How you think you did it: During week 2, Weng was determined to buy more food and prepare meals instead of buying food at work. “I did a big swag at the beginning of the week, I watched a YouTube video and made pasta … it was fun, but I realized I bought too much,” he said.
By spending $ 110 on food, Weng was unfortunately unable to finish all of his products, and some were spoiled. “Next time, I need to come in with a game plan so I don’t over-buy and stick to the bare minimum,” he said.
As for going out on the weekends, it has become a liberation. “Everything is open, all my friends want to hang out and it’s hard to say no,” he said. “But after this advice, I might have to limit my outings to once a week.”
To carry out: “Yes, car costs have always driven me crazy,” Weng said. “But sadly, it’s the only way to get to my job.”
Despite your high car costs, a necessity because you still work part-time at the restaurant, you are happy that the financial planner gave you a clearer plan.
“If I have to work like this and live at home until I can reduce my debt, so be it,” he said.
This means tackling your credit card first before jumping in and thinking about a new housing situation. Then you will move on to your OSAP payments.
“As I design more and more, I will be able to increase my rate and eventually spend a lot more on the money I owe,” he said.
Lastly, she feels a sense of relief that she is not the only one “slow” in terms of finding a career. “I could sit back and regret it, or I could try to change my life, and I’m determined to do this.”
Reference-www.thestar.com