How I Live Making $85,000 a Year In Mississauga, Ontario

Being a registered nurse here in Mississauga is not a bad gig at all. Living in the core of the city near square one, everything is close. From grocery stores, entertainment, and restaurants, everything is accessible. Its definitely a slight upgrade from where I moved from (sorry Brampton!)

I’d describe the day to day as steady. I don’t think the “work hard play hard” applies to myself. I definitely do work hard, but getting married and having things to pay for definitely makes you think twice before dropping a couple of Borden’s for bottle service at the nightclub. (that’s a Canadian version of the $ 100 Benjamin’s for my hip audience)

Ever wondered how far 85k would take you in the city and how my lifestyle is? Lets look at this monthly breakdown of how my money is spent.

Monthly Income Post-Tax — $ 4800

So according to my pie chart — my savings rate is around 63.7 %. Now this is how things would look like if I pay for everything myself. I am lucky enough to have another contributor in the household in the form of a wife. Through one sided negotiations, mostly favoring her :) we decided to split the maintenance and property tax. She was also happy to take care of the cable bill as long as I took on the Water and Electricity bill. You have to remember these rates are not guaranteed. So please consult with your wife as results may vary.

So with a little bit of help from the love of my life my pie chart looks a little more like this.

Almost saving 70% of my take home pay is a great place to start. But I am sure you’ve also noticed the big orange slice that’s taking a big bite. Having the convenience of a car definitely comes with a price. I pay roughly $ 584 towards my car including gas. You might be wondering why I haven’t paid off the balance in it. The answer is purely mathematical. The 1 % interest on it is built in the buyout price. Regardless if I pay it tomorrow or in 14 months when its due, I will be paying the same amount of interest.

Keeping the balance of the car in a government backed high interest savings account would actually leave me with a little more change at the end of the car loan term.

Lifestyle Assessment:

After almost half a year of living with this setup, I feel quite satisfied with what I have. Recent additions such as playing recreational sports have given me slightly more balance.

More importantly, nowhere in the past 8 months have I felt deprived. There seems to be plenty of room for myself for leisure. I also do not keep a “budget”. Every purchase I make automatically categorizes itself into either being compliant or non-compliant with my monthly expenses.

I think it is very safe to say that the saving “muscle” in my body is well conditioned. I’ve fallen into a routine and I know which expenses are nearing the YOLO level. Although this is true, I am still extremely lenient on things that I enjoy. For example, I eat out anywhere between 4–5 times a week. Although these expenses are not extremely expensive it is an area where I can save more on.

My Motivation for Saving

I’ve tried to identify the true value behind sharing my monthly expenses and why I save as much as I can. The two main reasons why this is important to me are as follows:

  1. Opportunity Cost- I see every dollar as a resource to deploy in the future. Whether it is to invest in the markets or to invest in myself, money can be used as a tool to improve your way of living or increase your skills. The opportunity to use money this way is lost once you buy a ticket to watch Captain Marvel. Yes, you enjoy it in the moment and enter a different world while you’re in the theater. But the keyword here is future. Once the movie stops, that 15 $ you paid for will be working for someone else. 
     I am more motivated to have majority of the money I make create opportunities for myself than vice-versa. The level in which people believe in this idea separates those who save vs. non-savers. Implementing this in your decision making may increase one person’s chance to defer immediate pleasure for a greater gain in the future.
  2. Valuing my Time- Time and money are finite resources. But if you ask me, your time is way more valuable than any currency. But if someone offered you to work 160 hours for a handbag would you do it?

Framed that way, its probably likely that the usual person would say no. But it doesn’t deter salary working individuals from buying that 2 to 3 thousand dollar Chanel handbag.

I see this scenario differently, If I save and place my money in a returning asset. The question becomes “would I work 160 hours, so I can make the same amount next year but in 140 hours?”. Two very fundamentally different ways of thinking. The latter invests in your earning potential. It allows you to reap more for the same amount of effort or hours.

Now don’t get me wrong, there are things that I would work 160 hours for. A week long trip to the Bahamas. An all-inclusive ski trip to France. I would even work 5 hours for a nice luxurious dinner at a Michelin-Starred restaurant. Things that I truly enjoy and find value in are ABSOLUTELY worth it. But its important to remember, it is not where majority of my money goes. It is done with discipline and is still aligned with my overarching goal.

Where Can I Improve?

This is where things get interesting because any adjustments to this dial can give the feeling of comfort or restriction. One area that has a big neon sign for improvement is the use of my vehicle. How does saving another 600 $ or so a month sound?

It sounds like this:
Walking to work everyday — 15-20 minutes each way.
Carrying your groceries at public transit — easier said than done.
Increasing share riding expenses — Taxi, Uber.
Relying on relatives/friends to attend events.
Going anywhere during winter. 
Potentially saving more because of the Hermit lifestyle — less motivated to go out

Another area to save on is to cancel Netflix, eat out less, and stop going to badminton. Of course, there’s a question of “living life” and being extremely frugal. Although, there are some areas where I can trim off, I’m quite satisfied with where things are. I definitely have room to be leaner, but I don’t see the urgency for it currently.

Note: The math for this article is based on an $80,000 a year base salary. The extra $5,000 is excluded as it comes from vacation pay, bonuses and investment income. These are usually budgeted for yearly trips or are reinvested.