On the search for stability
Moving out hinges on finding a job.
In our Smart Money series, #MillennialMoney, we ask people living in the Greater Toronto Area to record every penny they spend in a typical week. Then, using tips from a financial adviser, we challenge them to cut their spending the following week so they can save more money. Will they fail or succeed?
It’s been a little over a year since 23-year-old Priyank graduated university — but transitioning into the “career world” has been difficult in a pandemic.
“I’m unemployed on CERB, living at home with my parents,” he said. What has he discovered during this time? Finding a job is harder than expected, especially as COVID-19 cases rise.
CERB just ended, but Priyank is unsure of if he qualifies for any other benefits. “I need to do more research, it’s a bit unclear,” he said. In the meantime, he’s ramping up his job search.
Thankfully, he’s fortunate enough to have had family support to pay off his student debts.
Also, he’s continuing to live at home — but pays $50 a week, totalling $200 a month to help out.
That doesn’t mean he doesn’t want his independence. In fact, his plan is to be able to find a job to eventually be able to make enough money to move out of his parents’ home in Richmond Hill. “Short term, my goal is to have enough money to move out and live in Toronto.”
He’s also willing to consider other options. “I’m also applying to jobs in Vancouver, and want to have enough money in case I would move there for work,” he said.
For now, his day-to-day is about balance. “My day consists of job hunting, but also video calls with friends, exercising, doing art and watching sports,” he said. “On the weekends I’ll spend more time outdoors or do a physically distanced hangout with a friend.”
It also helps that he’s able to eat homemade food, but to contribute, he provides groceries or gets takeout for the family on some occasions.
On top of moving into a big city alone, Priyank also wants to be able to travel when a COVID-19 vaccine is discovered. “I have plans of travelling in Asia (but I’ll have a job at that point too).” Also, he wants to continue adding to his emergency fund, which he’s been saving from summer jobs since high school.
We asked Priyank to participate in the Millennial Money challenge to get a better idea of his finances.
The expert: Jason Heath, managing director at Objective Financial Partners Inc., on Priyank’s prospects.
Arecent graduate, Priyank is trying to find a job in a tough job market while around one-quarter young people are unemployed. Though the Canada Emergency Response Benefit (CERB) has come to an end, he may qualify for Employment Insurance (EI) regular benefits if he had at least 120 hours worked over the past year.
Priyank is lucky to not have debt coming out of school. The most recent Statistics Canada student debt survey found college graduates had an average of $15,300 of debt and university graduates had $28,800. Even better, he has some existing savings from working summers in the past.
I think Priyank needs to maintain balance given his goal to travel abroad. It gets harder to do extended international travel as you get older, secure a job, and start a family, but the problem with travelling when you’re young is you may not have much money. I like that he believes in having an emergency fund, so maybe the next step once he lands a job is to start saving towards those incremental travel costs.
I admire his initiative to apply for jobs in Vancouver and consider a cross-country move. I live and work pretty close to where I grew up and haven’t been nearly as adventurous. It’s important to be confident in a move like that before you make it otherwise the travel costs and furnishing a place to live far from home can be all for naught if you then need to or choose to move back. á I’d encourage Priyank to keep his savings invested relatively conservatively given some of his goals are quite short-term in nature. It could work against him to take on stock market risk and then need his savings at a time when stocks are down — as they are one out of every three years. A Tax Free Savings Account (TFSA) is probably the best vehicle to help shelter his investment income from tax.
Results: He spent less. Spending in week 1: $189.42 Spending in week 2: $134.81
How he thinks he did: “I think I did good!” Priyank said. He notes that most of his expenses were subscriptions or donations, and not like the “big purchases” he made the first week.
He also notes that his daily spending in the pandemic has gone down, which influences his monthly savings. “In normal times, I’d be commuting downtown to attend events and see friends, which is at least $100 a month,” he said.
“I’d also be eating out much more often and doing work in coffee shops, so another $150 on food each month. Plus, I’d go rock climbing which is $75 monthly,” Priyank added.
But despite those savings, seeing his spending on paper really opened up his eyes. “I honestly thought my expenses would be lower, and was a little surprised by how much I spend even when mostly staying indoors.”
Take-aways: After reading Heath’s long-term advice, Priyank says he feels empowered — despite not having a job yet — to start planning his finances. The advice that stuck out to Priyank? Having enough to save on travel.
“I dream a lot about travelling but don’t spend as much time thinking about how I can be more financially prepared for it,” he said.
“When I do land a job, one of my first tasks will be to start allocating money aside for incremental travel expenses.”
Finally, this exercise has enabled Priyank to feel more thankful about his situation, despite being jobless. “(I have) a sense of gratitude in not having any student loans,” he said. “I’m feeling less stressed about being jobless in this economic climate.” Are you a millennial living in Toronto or the GTA and need help with saving your money? Be a part of #MillennialMoney and email