Peter Andreasen has the financial savvy of a man many years his senior. The 30-year-old Vancouver resident is patiently saving his money, living frugally with his wife while he builds up his registered retirement savings plan (RRSP). “We have a debt-free approach to life,” he says. “There’s no credit card balance every month. By the time I’m 40, I’d like to have a quarter of a million.”
Mr. Andreasen’s wife shares in his financial conservatism. “We had very pragmatic expectations for our wedding. We didn’t want to be coming out of our wedding with any debt at all. So we had a very small family affair that cost under $5,000,” he says. “We didn’t go on a honeymoon.”
Since the nuptials, Mr. Andreasen has been chipping away at his $15,000 student debt, accrued while he completed an Masters in political philosophy at Carleton University, and which now stands at $3,000. While an oil and gas consultant, he was able to pay his debt off more quickly. But having changed careers – “I saw the writing on the wall” – and taken a role as a fundraiser in the health field, he’s less flush with cash. “At this point, it’s month-by-month paycheque discipline,” he says. “We put all our surplus into savings.”
A simple life also helps. Mr. Andreasen and his wife rent an apartment, buy in bulk, spend little on eating out and skip vacations. Their only big expenses are tuition, as his wife is studying law, and clothing – critical to looking professional at work.
Mr. Andreasen’s focus at the moment is starting a family. To meet that goal, he has decided to forgo the usual trappings of married life – a car and a house. “My wife and I discussed owning a home. But we live in Vancouver and this is not on the table. To pursue a $1-million mortgage – we would never do that. We want to have a family in the next few years.”
After that, it will be all about retirement. “I want to build my retirement savings. And I will look at ETFs [exchange traded funds] when I’m done paying off my student loan,” he says.
“The future is so opaque these days.”
His typical monthly expenses:
$1,360 on rent. “That includes everything – gas, electricity, Internet.”
$700 on groceries. “It’s probably our biggest expense. We buy our veggies at a Farmer’s Market; No Frills for cereals, rice, pasta in bulk.”
$200 on eating out. “We go out once a week. We might go to a bar for a couple of drinks. We might get an $8 bowl of Vietnamese soup.”
$40 on coffee. “That would include a nice bag of coffee beans.”
$60 for wife’s cell phone. “My work covers my cell phone.”
$8 for Netflix. “Other than that, we use the library for DVDs.”
$0 on a gym membership. “One nice thing about Vancouver is exercise is free. We try to get out every week three or four times to walk.”
$0 on transit. “I walk or bike to work. I have an old mountain bike that I bought when I was 20. I think it’s quite a bit faster than transit.”
$120 on cinema/theatre tickets.
$80 on alcohol. “We might buy a bottle of whisky and a couple of bottles of wine. We have people over for dinner.”
$0 on a car. “One thing we decided early on is that we wouldn’t own a car. Not owning a car saves hundreds of dollars a month. It’s nice living in a place where there’s no winter – it’s easy getting around.”
$10,000 in tuition. “[My wife] goes to law school. I help her out with that.”
$100 on clothing. “Clothing is by far my biggest personal expense. I buy shirts and sport coats. I do have some expensive shoes but you maintain them. I’ve tried to maintain a small and versatile wardrobe. Sometimes I go to Brooks Brothers but it’s a little pricey. They have a good Boxing Day sale.”
$0 on holidays/trips. “The last trip we went on was three years ago to Chile. It was a gift from my wife’s parents. We [now] put away $100 a month in a high-interest savings account. We’ll probably go on a trip next year.”
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