Millennial Money is a weekly presentation-based series that provides financial advice to millennials. Read the complete series here.
At 30, Liam admits he is embarrassed still living at home with his parents.
Earning $35,000 working at the grocery store, she watched her younger sister move, get married, buy a house and start a family. But due to “a bad streak in her 20s” she had to drop out of school and has not returned.
“I have $5,000 left in student loans for a program I didn’t finish,” Liam said. “I was really upset about it, but now I just want it done, so I’ve been just living at home.”
Though he thinks it’s a late bloomer, he still doesn’t want to be a slacker, he says, and pays his parents a little rent, and also buys groceries on his employee agreement to help out around the house.
“Luckily, they bought this house 30 years ago and our mortgage is up, so I’m happy with anything I can do to help,” he said. “I usually have simple meals and I rarely order pizza to go once or twice a month. My mom cooks for me.”
On the weekends, he keeps it relatively the same, minus an occasional takeout or bubble tea purchase with friends once or twice a month.
Liam’s main goal is to pay off this OSAP loan and figure out his future, knowing that he won’t be making much more in his minimum wage job at the supermarket.
“I want to save money and see what my options are to go back to school or something shorter. Are there benefits for people like me? How about trades or colleges? she asked her. “I don’t want to be a burden to my parents anymore.”
We asked Liam to share a week of expenses to get a better idea of his finances.
The Expert: Jason Heath, CEO of Objective Financial Partners Inc.
Liam went through a rough patch when he was 20 years old. He now lives with his parents at 30 and is not sure what is the best way to re-launch. His income from working in a supermarket is modest and he is still paying off student debt from a degree he never completed.
I think it makes sense to go after that student loan and then start building a savings account. This will be important in getting you in a position to move and help finance the costs of a possible return to school.
There are programs that Liam can consider to help with education funding. In addition to Ontario Student Assistance Program loans, there are Canada Student Scholarships of up to $9,000 for the 2022-2023 academic year, a Skills Boost add-on to the Canada Student Scholarship of up to $2,400 per academic year, various scholarships apprenticeship and other provincial financial support. I think he needs to reflect on whether school is the only way out of his job at a grocery store. It can be short-term pain for long-term gain.
I notice that Liam spends only $50 a month on gas but $200 a month on insurance. Liam probably won’t drive much if he only spends $600 a year on gas, so it begs the question: Is paying $2,400 a year for car insurance, plus other costs of car ownership, worth it? He should consider whether public transportation or ride sharing might be more affordable for the minimal trips he makes.
I have to mark the $300 monthly video game spending. That represents 14% of Liam’s after-tax income. If he didn’t have debt and wasn’t saving for school and moving, maybe it wouldn’t be such a big concern. But perhaps this element of the budget can be a sacrifice to help Liam save to improve his skills and his work to achieve his long-term goals.
Results: He spent less. Week 1 spend: $760.50 Week 2 spend: $278
How do you think you did it: Although Liam thought he had been spending wisely, writing down his weekly expenses made him realize how much he was spending on video games.
“As the adviser pointed out, it’s about 14 percent of my earnings,” he said. “Sometimes, because I’m so lost, I find that I turn to video games as something to distract myself, but it costs me more than food and other necessities.”
In the future, he said he will limit his spending and be vigilant, without giving up his hobby altogether.
Takeaway: “I really like the feeling of clarity, even if it’s hard to hear,” Liam said.
That means focusing on reducing student debt while researching future careers.
“It’s good to see that there are options and benefits for students,” he said. “But the adviser is right. He maybe he can see if school is the only way out of a minimum wage job.”
One big change you’re considering is getting rid of your car entirely.
“The adviser is right, I usually get trips or TTC, so my car isn’t even used that often,” he shared. “Cutting back those hundreds of dollars could help me get back on track faster.”
Perhaps most importantly, Liam says, is how this exercise helped him become more optimistic and action-oriented, rather than constantly depressed and feeling like a failure.
“It’s okay to start your life later. The important thing is to get help.”
Are you a millennial living in Toronto or GTA who needs help saving money? Be part of #MillennialMoney and send an email to [email protected]
Digital design by McKenna Deighton.
Are you a millennial living in Toronto or GTA who needs help saving money? Be a part of #MillennialMoney and email [email protected]
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