# Money Diary of a guy from Vancouver



## eagerbeaver (Mar 23, 2017)

I've been reading a few of the diaries on here and was inspired to start my own to keep track of my progress.

A little about myself:

I'm currently 32, separated from a long term girlfriend a few years ago. We've owned a property together that we bought back in 2010 and had a decent combined income of about 150k annually. During 2011, we both simultaneously lost our jobs due to shortage of work and company restructure. I was out of work for about 10 months, and she was out of work for about 13 months. As you all can imagine most of our savings went towards the downpayment. With a mortgage to pay down as well as living expenses and car loan, both of our emergency funds slowly dried up. We we're under a lot of stress at the time as debt started to pile up. When I finally found a job working again in 2012, I thought we were going to be back on track, however her and I shortly called it quits in 2012. We both moved out of the place and I moved back with family :dread:. Decided to rent it out to cover the mortgage for a few years. To top it off the tenant i had was terrible and cause me about 8k in damages (but that is another story , and probably for a different forum) I honestly felt like a financial wreck at the time.

Fast forward to beginning of 2016, I managed to buy our my ex's half of the property! and I've also met my now fiance! (and yes, I sill chose live with family, and I've become quite comfortable here :welcoming:, and don't feel it is something to be ashamed of) but plan on moving in with the fiance shortly as she had bought a place together with her sister. Lucky she is also a saver! However, i still feel that my unfortunate past had dragged me down, but I try to look forward and I am confident I will fully recover. Hopefully would like to hear some of your opinions along the way (good or bad) to get me on the right track! 


Snapshot of my current NW (March 2017):

*ASSESTS:*
Property - $510,000 current assessment
Vehicle - $21,000 approx current used market price
RRSP - $18,970
Chequing - $14,653
Savings 1 - $2,862
Savings 2 - $676

Total Assets: $568,161

*LIABILITIES*
Mortgage - $330,130
Vehicle Loan - $17,112
LOC: $11,134
Credit Card 1 - $9,954
Credit Card 2 - $2,995

Total Liabilities: $371,325

*Total Networth : $196,836*


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## james4beach (Nov 15, 2012)

Welcome to the forum!

What are your annual living expenses?

One metric I always calculate when people post their net worth is leverage, which I calculate as Leverage = Assets / Net Worth = 568,161/196,836 = 2.9

Yours at 2.9 is on the high side (you can browse some other money diaries; I think people's leverage typically ranges from 1.0 - 2.0). The danger with high leverage is that you are very exposed to risk. For example imagine that your property and RRSP declined 30% in value. Your resulting net worth would then be 38k, a decline of 81%.

It also sounds like you bought a rather expensive car. Going forward, it would probably be good to keep your lifestyle costs as lean as possible, even when you're employed and earning income. For example it's possible to buy a good used car for 5k or maybe 10k max. I wouldn't change your current car, but I'm saying that it will help your financial situation if you try to minimize your living expenses going forward.

I'm not sure what your first step should be but I would definitely pay down debts (particularly high interest rates -- if any) and avoid taking on any new debts.


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## eagerbeaver (Mar 23, 2017)

*five books*



james4beach said:


> It also sounds like you bought a rather expensive car. Going forward, it would probably be good to keep your lifestyle costs as lean as possible,


Hi James, that is sound advice. In the past, I've always owned an older, inexpensive, used car (typically ~$12K) paid outright. However, my current vehicle was my first ever treat to myself and '_new-ish_' car I've ever owned (2 years old at the time) as I do not believe in purchasing brand new. A close friend of mine worked at the dealer in a position higher up on the totem pole and gave me an offer I could not turn down. I needed something newer and more reliable, and most importantly, more practical (being an SUV). My previous vehicles were sportier cars that I feel I should be growing out of. Prior to this purchase, my previous vehicle was involved in an accident that was written off. It always seems that most of my expenses incurred were due to bad luck! In hindsight, i could have just passed on the deal and looked for something less expensive....





james4beach said:


> I'm not sure what your first step should be but I would definitely pay down debts (particularly high interest rates -- if any) and avoid taking on any new debts.



Agreed, I plan on putting my credit card balances into my LOC and contribute with whatever leftover cash after monthly expenses to aggressively pay down the amount.





I must say that 2016 was my most expensive year (_On top of my regular annual expenses_) which includes spending on:

$40,000 (Ex's buyout of her share the property + lawyer fees for title change)

$5,000 in unexpected vehicle repairs (yikes)

$8,000 (in property damages due to a horrible tenancy situation. My place was trashed, wall patching, full repaint, cleanup new appliances, etc. Again, this is a totally different topic for another discussion. I am still in the process of seeking compensation for damages through our legal system but it seems to be a very slow process and I don't even have confidence I will be able to recoup these costs...the damage was done and tenants had already vacated way before I could even get a writ of possession from the court to hire a bailiff to physically throw them out,) 

$5500 (two months loss of rental income due to vacancy required repairs and looking for new tenants, plus one month unpaid rent)

$6500 engagement ring for my fiance from Blue Nile. (justified, shes a keeper,)

$5000 on a trip overseas to visit a relative in poor health.

$1650 on an all-inclusive trip to mexico to take a breather from the stresses of life.



Hopefully that will give you guys a good idea that lead up to my present financial position. I'm really hopeful that 2017 will treat me better financially.


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## eagerbeaver (Mar 23, 2017)

*Monthly budget*

Further to my previous posts, I'd like to tell you more about myself. 

I didn't grow up wealthy, and came from an immigrant family. I didn't have much as a kid growing up. The only allowance I've ever had was in high school where my parents would either pack me lunch or give me $5 to purchase lunch at the cafeteria. I saw how hard my family worked to raise us and put food on the table. On the days that my mom gave me allowance for food because she was too busy to make me something for lunch, I would choose not to eat just to save it! I started to working part-time right when I was at legal age to do so. but at the same time my grades started to suffer a bit.

Fortunately, I managed to get accepted into a university funded by student loans, and partly by part-time work as a trades helper. Fast forward a couple years into my studies, I decided to drop out of university because trades seemed to be more rewarding to me at the time. My part time employer saw my potential and offered to sign me on as an apprentice. Apprenticeships were basically subsidized by govt grants after successful completion, and during the off times in school, my wages would be covered by EI, how could I possibly turn that down?? I was quickly promoted up the ranks and making very decent money for my age. In 2008, the construction industry slowed down significantly and got laid off. Made a few adjustment to my life since then work an odd job for a while, and career change and now I work in an different field of work, (although still in the construction industry). Although at times, I do kind of regret sacrificing a job offer in Alberta during the oil boom for an easy 6 figure income, but looking back,that would have been short lived anyway and would've lost the stable and very safe career that i am in now. In 2009, at the age of 24, a presale development caught our eye, and purchased my home with my ex with a 20% down payment (10% each). I don't mean to brag, but I felt very proud of this accomplishment being the first of my peers to make it to that milestone! Most of my peers at the time we're either still in school, or working close to minimum wage.

I'd like to say that I think of myself as a fairly frugal person, I don't wear fancy clothes or buy useless consumer goods (very far from a spendthrift). I've always believed in hard work, and I feel I did well for myself in my past but now I just seems like i've gotten myself in some kind weird financial rut where time after time, every step forward, I end up falling 2 steps back. Hopefully the advice on this forum will get me on the fast track into financial freedom..


Enough about me, here's my current monthly budget:
Annual salary $75,000, + $2,000 employer DPSP contribution, + ~$4000 avg annual bonus.

*Monthly Income*

Monthly income (after tax and RRSP auto contribution): $4319
Rental income: $2100
Company expense reimbursment: @~$300

Total Income:* $6719*


*Monthly Expenses*

Mortgage: $1594.67 avg. (I pay on an accelerated weekly payment @368/week, includes the property tax amt)
Condo fees: $180
Municipal utilities(water/sewer): $62.5 ($750/year) 
Car Loan: $680 (payment ends in august 2017, with a balloon amt of ~12k left over, cant remember exact amt. off the top of my head)
Car Insurance: $180
Gas: $450 
Phone: $12 (partially paid by company allowance) 
Dog: $50
Food/Entertainment: $500

Total monthly Expenses: *$3659.17*

Income - Expenses = *$3059* in the green per month 



Help me maximize this green!


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## eagerbeaver (Mar 23, 2017)

james4beach said:


> Welcome to the forum!
> 
> What are your annual living expenses?
> 
> ...



Hi James, not sure why my original response to you didn't go through so I'm tryign again. Probably something to do with being a new Member. (sorry if the original post ends up on here and becomes a repost!)

To summarize 

I've only ever owned older used vehicles in the past about (<~$12,000). due to an accident at the time, my previous vehicle was written off. And in need of a "new-ish" used car (only 2 years old at the time) as i dont believe in buying new due to the initial depreciation. Fortunately a friend of mine work as a sales manager at a dealership and offered me a deal i could not refuse. In hindsight i could have just passed on the deal and looked for something more economical. But at the same time I wanted to get a newer, more mature, practical and reliable car (SUV, my previous vehicles were the sportier type that i feel i should grow out of by this age) and would've like to treat myself. I chose the latter.

2016 has been an unusually expensive year for me that lead up to my current financial position with some large expenditures beyond my regular monthly expenses. but hopefully things will turn around for me in 2017:

$38,000 (to buy out ex's share of the property plus lawyer fees for title transfer)
$5,000 (unexpected car repairs)
$6,500 engagement ring from blue nile (justified, Shes a keeper)
$8,000 (property damage from a horrible tenancy situation, still trying to recoup this cost, but not very hopeful)
$5,550 (2 months of vacancy and one month of unpaid rent that i had to cover)
$5,000 (trip overseas to visit a relative in poor health)
$1,650 for all inclusive vacation to get away from the stresses of life.

total expenditure beyond my regular expenses in 2016 = *$69,650*



That is where my money went in 2016


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## Mookie (Feb 29, 2012)

First things first: Pay off those two credit cards immediately with the excess funds in your chequing account, then use your excess monthly cash flow to pay down the car loan and the LOC, starting with whichever has the highest interest rate.


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## Lost in Space 2 (Jun 28, 2016)

You have a nearly 50% savings rate that is very impressive in and of it's self. It reminds me of comment I saw somewhere, guy with like 5 kids and good income managing to save nearly half his income. Everyone was flabbergasted at how he managed it so well. H said that he just made sure his expenses didn't rise as fast as his income!!!!!

That would be my advice, work on making sure your income increases more than your expenses!

good luck and keep the journal up!


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## LXG (Feb 16, 2017)

You are doing very well for your age and after the financial costs of separating from your ex. I know that separating from my ex was my definitely my biggest expense of 2016 (and actually, after the child and spousal support, it will be my biggest expense for 2017, 2018...). Does your company match your RRSP at all? Is your RRSP in a company-run program or with something you set up by yourself? Have you figured out how you will share costs with your fiancee and her sister and roughed out a budget for when that happens? It might make sense to remain with your family until you get your debt down to a more manageable level. It's fantastic that you have family support!


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## eagerbeaver (Mar 23, 2017)

Logging in for my 6 month progress update! (Sept 22 2017):

*ASSESTS:*
Property - $550,000 (based on average recent sales at my building according to realtor) 
Vehicle - $20,000 (approx current used market value)
Chequing - $5122
Savings 1 - $495
Savings 2 - $2101
Savings 3 - $1103
RRSP - $21,217
TFSA 1 - $1415
TFSA 2 - $6250
Total Assets: $607,703

*LIABILITIES*
Mortgage - $326,280
Vehicle Loan - $0.00 (Closed, transferred remaining balance to LOC)
LOC: $26,430
Credit Card 1 - $932
Credit Card 2 - $2655

Total Liabilities: $356,297

*Total Networth: $251,406 * (+$54,570 since March 2017)


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## tavogl (Oct 1, 2014)

Why pay interest on those credit cards when you can pay all of it right now from your savings?


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## eagerbeaver (Mar 23, 2017)

2021 Update!

Wow, Its been almost 3.5 years since I've logged in to make an update! I almost forgot that this was the forum where I was inspired to improve my personal finances. Its amazing to look back at these post after these years,... I am so proud of the progress I've made. The biggest hurdle was paying off the debt as quickly as possible. The NW really starts picking up after that! So glad to be debt free (other than the house)!


*ASSESTS:*
Property - $650,000 (based on average recent sales at my building according to realtor)
Vehicle - $10,000 (approx current used market value)
Chequing - $6,200
Savings 1 - $35,136
Savings 2 - $2101
Savings 3 - $1103
RRSP - $54,346
TFSA 1 - $2478
TFSA 2 - $6899
Total Assets: $768,263

*LIABILITIES*
Mortgage - $295,825
Vehicle Loan -$0 N/A
LOC: $0
Credit Card 1 - $0
Credit Card 2 - $0

Total Liabilities: $295,825

*Total Networth: $472,438 *(+$221,032 since Sept 2017)


Until the next update!


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## milhouse (Nov 16, 2016)

eagerbeaver said:


> I am so proud of the progress I've made. The biggest hurdle was paying off the debt as quickly as possible. The NW really starts picking up after that!


We had a similar experience where we saw our networth growth accelerate after we were able to redirect mortgage payments to savings/investments. It was a good feeling.


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