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How we saved a 6-figure down payment

Most of you know that I live in Vancouver, and housing in Vancouver is bananas. Like, it’s legitimately insane. The average price for a detached house sold in Greater Vancouver was $1,830,956 in May (!!!), and the average price for a condo? $656,919 – up 15.1% from 2015.

When RD and I bought our condo a few months ago, we managed to combine our savings for a 6-figure down payment. $125,000 to be exact. Neither of us got help from our parents. We didn’t receive any sort of inheritance, and while we both have good full-time jobs, we still live in the middle-class.

So how did we do it? For me personally as a natural spender, it was a lot of hard work balancing needs vs. wants, but also making savings a priority for the better part of the last decade. The bulk of our savings was done individually before we met each other, so when we did eventually move in together and our housing expenses decreased, we just kept the savings train moving along.

Here are a few main reasons why we were able to save up a 6-figure down payment:

Eliminated all debt

Long-time readers of GMBMFB will know that this blog was born because I was on a quest to get out of debt. My main goal after graduating college was to get out of debt as fast as possible. I knew that debt would hold me back from every major goal I wanted for myself – to move out of my hometown, to take chances when it came to my career, to travel, and to buy a home – and I didn’t want to regret missing out on opportunities because I couldn’t afford to take risks.

Related: It’s not how much you make, it’s how much you save

RD has always been good with his money – even when he didn’t have much. His parents were (and always have been) good role models when it came to frugality, and he left University with zero debt because he worked hard tree planting every summer. 10 years later, he’s extremely debt-adverse and while he definitely has things that he splurges on, he is way, way more frugal than me.

Avoided lifestyle inflation

I’ve worked hard at trying to curb lifestyle inflation, but of course my budget has increased in the past 10 years. So the way I keep my overall costs down is by prioritizing my purchases and stopping myself from spending money on stuff that doesn’t bring value to my life.  For example, I don’t really put value on make-up or beauty products, and I also don’t care for nice cars, jewelry, alcohol, or going to fancy restaurants – so I spend very little money on those things. Instead, I focus my spending on what I love to do. I’d rather put my money towards traveling, the occasional splurge on concerts or event tickets, and buying quality ingredients when I cook.

But I have a serious weakness for Anthropologie and anything at MEC, and sometimes I get lazy with cooking, so it’s all a work in progress. :)

Banked all extra money and windfalls

I’ve never had a big salary from my full-time job, but I’ve always had multiple streams of income. At the beginning, it was to get myself out of debt as fast as possible, but then it was to save money for a future down payment, as well as for my retirement. I’ve done a lot of crappy jobs over the years to earn money, but it helped me set up a good financial foundation for myself. Almost all of my freelance income goes towards some form of savings, and whenever I get a raise, I make sure to increase my savings rate accordingly.

Related: Here’s how I saved 50% of my income in 2016

There was that time I worked two full-time jobs at the same time … I also took on freelance graphic design contracts, started freelance writing, sold stuff on eBay, worked minimum wage part-time jobs for YEARS, and of course started this blog (not with the intention of making money, but has ended up being a decent source of income). I may not have always enjoyed hustling so much in the short-term, but it helped me achieve some pretty big goals in the long-term, and it got me to a better place in life. So it was worth it for me, and I look back on those years with gratitude that I had enough foresight to work as hard as I did.

A “Savings First” lifestyle

I used to save my money at the end of every month, if I had anything leftover after paying my bills. But the problem was, I almost never had anything leftover. So I decided to switch up my strategy and build my budget backwards – with savings as a line-item that was just as important as my rent. If I found I wasn’t able to put away that amount into savings and balance the rest of my budget for the month, I looked at ways I could cut expenses or earn more money. This strategy meant I was almost always hitting my savings goals – whether it was for retirement or shorter-term purchases.

Understanding that saving for a down payment is a long-term effort

Buying a home is a long-term decision, so saving up for one should be as well.

I get it, saving for a down payment can seem really intimidating. Especially when you’re faced with crazy real estate prices. But if you keep your home expectations reasonable, and realize that saving up that kind of money is a long-term process, it can be done. It took me 5 years to get out of debt and save for the down payment on my first place. But it’s not just about being able to save the down payment – it’s also having a strong emergency fund should anything happen in the future, and also being responsible enough to understand that buying a home is a huge responsibility and not one that should be taken lightly. I don’t think I would have been mature enough to take on home ownership when I graduated college at 23 – or even a few years afterwards. And honestly looking back, I’m glad I spent the rest of my twenties renting and saving money. Because even at age 28 when I bought my first place, I still wasn’t fully settled.

Related: My biggest home buying regret – not considering the future

It was never my intention to use my savings for a down payment this year (I thought I’d be renting for the next 10 years+ of my life). But when the opportunity presented itself, and RD and I were in the right place in life and in our relationship, I felt extremely grateful and lucky that we were able to go through the home buying process without any real financial strain. And that was because of the “savings first” lifestyle we have both been living for the past 10 years.

Are you currently saving for a down payment?

Why I don’t want to be self-employed

IMG_1770I was 29 when I quit working in a cubicle and became self-employed. It was a huge step, and I was excited to experience the freedom of setting my own schedule, working wherever and whenever I wanted, and creating a lifestyle that I had always dreamed of. I was eager to test myself to see how much I could accomplish on my own. Plus, I was moving to Germany for a year with my boyfriend, and that just added to the excitement.

My passion for my new freelance life was further fuelled by the fact that so many of my friends were either already working for themselves, or aspired to one day work for themselves. I felt like I had finally achieved something important: after two very difficult years of working 70+ hours/week at both my full-time job and freelancing, I had grown my freelance writing gigs and this blog from nothing, into something that I could actually make a decent living from. I had steady clients in place, and a good amount of extra freelance work rolling in.

However, after a year of doing my own thing, I knew that being self-employed wasn’t the right fit for me … which was interesting to learn about myself after years of wondering if I could make it on my own.

Although the year I spent freelancing proved that I have what it takes to work for myself if I ever wanted to go that route again, I am much better suited working for someone else for the rest of my career. Freelancing and self-employment isn’t for everyone, and I honestly think it’s a lifestyle that not many people can handle (no matter how much they dream of being their own boss). I’m constantly impressed by my friends who are thriving as freelancers because I know it takes a special kind of person to make it work.

Here are four reasons why I left freelancing and went back to my cubicle (and none of it had to do with not making enough money!):

1. Freedom

Yes, freedom! So many people talk about wanting to have the freedom to create their own schedule, and not feel like they’re chained to their desk. Well, I’d rather be chained to my desk for 8 hours a day than feel like I’m chained to my own laptop and smartphone 24/7. Honestly.

Sure, I got to work whenever I wanted, and travel when I felt like traveling. But as it turns out, I was kind of a demanding boss on myself. I always felt pressured to work harder, and when I wasn’t in front of my laptop? I was either checking my emails and looking at social media, or worrying about checking my emails and looking at social media. I didn’t want to miss any new opportunities, and it drove me crazy. It’s pretty horrible to feel like you can’t be without your phone, ever. I had major anxiety, and started to lose all sense of balance. My work consumed me, no matter what kind of schedule I tried to implement. I wasn’t practical, because I was too scared not to hustle as much as I could.

So even though I was only doing actual work for 30 hours a week as a freelancer, I never felt like I could step away. Whereas a full-time job brings me the freedom to leave work behind. After 5pm, I don’t have to worry about projects or clients or income targets, and my evenings and weekends are mine to enjoy however I want. Life is short, and I’d rather hold hands with my boyfriend in the park after work, than sit in front of my laptop trying to hit a deadline.

2. Time Off

I used to think that if I became self-employed, I could take as much time off as I wanted to. But it was actually pretty hard to go on vacation and complete unplug from the outside world. Sure, I traveled a ton, but the problem with being your own boss is that when you’re on vacation, you’re not getting paid. Plus, most evenings (and yep, sometimes during the day) when I was on vacation, I was checking e-mails and following up on work-related admin stuff, or stressed out about a client reducing their budget – none of which were relaxing!

My old corporate jobs allowed me two or three weeks of vacation, which obviously was not enough time for the amount of traveling I wanted to do each year. I yearned for more time to go adventuring, and thought freelancing was the answer. But what I didn’t realize was that perhaps it was just the industry I was in that was limiting my freedom.

I love the industry that I’m in now because of the flexibility it provides when it comes to time off. I feel lucky in that every little bit of time I work above and beyond a normal work day gets given back to me – which works out to having seemingly unlimited vacation time. Last year I took 6 weeks of paid vacation, and this year will likely be around the same. Maybe even a bit more. And best of all? I don’t have to worry about anything related to work while I’m gone.

3. I am not special

I have a very good idea of where I stand in the personal finance world. I’m an average writer with an average get-out-of-debt story. I don’t have any unique skills, and I’m not special. But what I do have is an above-average passion for personal finance, and the desire to help others. And that’s why this blog has been around for almost 10 years.

There are so many other people who have the self-employed thing dialed in. They know exactly what to do and how to do it, and if I’m being honest, I don’t have that fire in me. When I used to tell people I was self-employed, they would tell me how amazing that sounded, and how they wish they could do the same sort of thing. But in reality? I was craving stability and a normal 9-5pm work week. :) Which brings me to my next point…

4. Stability

The ability to work for yourself opens up the doors to limitless streams of income, and I will admit that felt super liberating. But I’m a natural worrier, and even though I had steady contracts which gave me a steady income stream, having the rest of my income fluctuate caused my anxiety to skyrocket. Some weeks I would bring in thousands and I’d feel so confident. Then there were other weeks I’d make nothing and I would start to panic. Everything evened out over the course of the year to provide me with a perfectly livable income (that was actually more than my previous full-time job provided), I couldn’t handle the ups and downs with grace.

My desk job provides me with the stability I crave. I know that every two weeks, I’ll be getting X amount of money. It’s something I can count on, and I need that feeling of stability.

Being self-employed is a terrific option for some people. I have plenty of friends are are self-employed rock stars! But it’s a lot less glamorous and a lot harder than you might think. I know myself well enough to know this now, but it took me half a decade of freelancing and a full year of being self-employed to really understand it.

Have you ever wanted to work for yourself?

You know you’re in financial trouble when…

carWhen I was in college, we had to do a mandatory 4-month co-op during the summer between our first and second year. I wanted to do something in marketing or event coordination, but couldn’t find anything in Victoria. I did, however, find a position with a non-profit in Northern Alberta. So without hesitating, I said yes to the barely-above-minimum-wage job and the chance for a bit of an adventure.

I decided to drive the 1,300km to my new temporary home because I knew I’d likely need my car while I was up there. But since my car was basically a piece of crap on wheels, I was going to have to take it into a mechanic to make sure it was safe to take on my short road trip. When I found out it would cost just under $1,000 for the repairs, I remember nearly bursting into tears. I didn’t have that kind of money! So for the first time in my adult life (and the first admittance to anyone that I was in any sort of financial trouble), I asked my parents if I could borrow the money from them.

“You don’t have $1,000?” I remember my dad asking. I felt shame. Nope, I didn’t. His face fell and he kind of shook his head in disappointment, but he loaned me the money. I got my car fixed, and away I went on my road trip. But I felt so horrible about owing him money that I paid him back with my first pay cheque (which ended up being the entire amount – and a little bit more) – and lived off my credit cards until I got paid again.

Except that when I got paid again, I had to pay off my credit cards. And it was just so easy to fall behind when the minimum payments were a lot more appealing than paying off the entire amount. A few pay cycles like that, and all of a sudden I had maxed out my credit card.

I’ve mentioned it in a few posts lately, but life is a lot easier now. I don’t feel like I’m falling behind, and I actually have savings in the bank and a financial plan for the future. But I will admit that I still feel a bit of a victory whenever I can fill my gas tank up completely (instead of only putting in $10 worth of gas because it was all I could afford).

I’m not really sure what the point of this post was, but I wanted to share the story of the first time I admitted to anyone (including myself) that I was in any sort of financial trouble. Even 11 years later, I can still see that disappointed look on my dad’s face, and it’s something I hope to never, ever see again.

Can you remember the first time you knew you had money problems?

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