Give Me Back My Five Bucks

Breaking down my cost of renting vs. owning

Over the last few days I started calculating how much it would cost me to sell my home in the suburbs and move downtown. After a feeble attempt at finding a condo in Vancouver within my price range (that wasn’t a complete dump), I’ve come to the (obvious) realization that I’ll be a renter once I move. And I’m okay with that, because there are actually a lot of options for me to choose from.

So in order to see how much I would save by moving downtown, I decided to take a typical monthly budget with my mortgage and compare it to what I would be paying if I were renting instead:

mortgage_vs_rent

Note: Rent in the area I want can vary in price from $750/month micro-lofts to $6000/month luxury oceanfront condos. While I actually do find the idea of living in a micro-loft appealing, for the purposes of this exercise, I went with $1,200/month rent – which is slightly lower than the average of around $1,400 that I was finding.

So based on the numbers above, I’d be saving $400 month. Huge money to me. Not only that, but I’d be cutting down on my commute (most places I looked at I could walk to work), and I’d be within walking distance to a lot of the things that I love to do in this city.

There are drawbacks though. First of all, according to my mortgage terms, I’d have to pay approximately $1,900 to back out of my mortgage. Not as much as I thought I’d have to pay, but still a significant amount. And for field hockey and visiting my friends, I’d have a longer commute from downtown because obviously I’d be farther away. But I know I’d be happier moving, so I think the positives outweigh the negatives.

$400 extra in my budget means that I could bring my retirement contributions up towards the $1,200-$1,300/month range with no real effort, and I find that extremely appealing. It then becomes feasible to start looking at potentially being able to put away closer to 50% of my income from my full-time job towards retirement, but one step at a time I suppose. :)

July 2015 Goals

Well I said I would bring back my monthly budget spreadsheets, and here is the first one. In the months since I last posted one, I never stopped creating them for my own use, I just didn’t share them with you. :)

July is a bit of a strange month as I continue to adjust to life in my own home.

I was able to forecast a few expenses, namely a fun field hockey tournament I was asked to play in a few weeks ago ($25), and a family trip to Seattle to watch the Blue Jays play (which was planned back at Christmas time). Other than that, I’ve budgeted a little more room for entertainment since it’s the summer, and have had to increase my gas budget by about 25% to accommodate for the extra driving I’ll be doing this month.

July2015-Budget

July 2015 Goals:

  • Go hiking twice. I’ve already gone once – to Mt. Brunswick on Canada Day. And I am planning on going hiking again this coming weekend.
  • Clean and organize my house. I’m continuing on my path to a more minimalist lifestyle, and while I’m having a difficult time throwing some things away, I’ve made significant progress in donating 6 or 7 huge garbage bags full of clothes and getting rid of the majority of my DVD and book collection.
  • Save $900 towards my RRSP/TFSA. As some of you already know, my automatic contributions sit at $700/month. I’d like to increase this by $200 just to see how comfortable it feels.
  • Invoice all freelance clients. I fell a bit behind invoicing clients for work that I’ve done. I need to send out invoices and keep my spreadsheets updated on a weekly basis.
  • Find out about mortgage penalty. I’ve been meaning to call my bank to ask what the penalty would be to cancel my mortgage early if I decide to sell this year (I have 8 months left on my 5 year term). This needs to get done in July, so that I can look into listing soonish if I decide that’s what I want.

Inspiration and early retirement

I’m sure you can tell that this site has taken a backseat in my life, and while I’ve always had good intentions to write more often, I needed that little kick in the butt to do it. I got that spark recently when I met someone so financially inspirational that I couldn’t stop thinking about all of the things I needed to write about on GMBMFB.

Why was he so inspirational to me? Because, as a regular guy making a regular income, he is set to retire by the age of 40.

Early retirement has always been a huge focus on my blog, so you can imagine my delight when I met someone who was considerably more hardcore about retirement than me – and wasn’t Tim Stobbs. :) I think what surprised me most was that he wasn’t a personal finance blogger, and didn’t even read PF blogs. Yet, there he was. With a concrete long-term plan to retire in just a few years. It made me realize that if early retirement is still something I’m passionate about (and I definitely am), then I need to focus more on that goal. I’ve been slacking and not saving nearly as much as I could be saving.

Related: What does early retirement mean to you?

So with that being said, I’m going to be making some changes on this blog. I’ll be bringing back my monthly goals and recap posts (with actual numbers and not percentages – based on reader feedback), as well as my weekly spending reports. I realized that those posts (however tedious they were) really helped me focus on the bigger picture. I’m also going to increase my RRSP and TFSA contributions, with the hope of getting closer to investing $900/month.

Related: Why 20-somethings might have trouble retiring by 65

Life is funny sometimes. Short-term goals and plans will always be evolving and changing, but my financial goal of early retirement has always stayed the same. I’m 32 right now, with little financial obligation besides my mortgage. I know I’m never going to retire by the time I’m 40, or even 45. But I do want to stop working earlier than I’m able to, and I need to keep my eye on that prize.

I love this blog, and I’m really excited to start writing again.

P.S. if you haven’t already bought your ticket to the 2015 Canadian Personal Finance Conference, what are you waiting for? :)

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