At the age of 30, Jeremy is making $125,000 a year as a freelance marketing consultant. Despite his high income, he still lives at his family’s home in North York. His rent? $650 a month, which he pays to his parents.

So what are his savings goals? Jeremy just wants some clarity.

He says that his main goal is to save for retirement, but recently, after looking at condo prices online, he’s trying to decide if buying a place would be a good investment. “I have a big spreadsheet with all the costs of renting against buying, but property value change is the big wild card so I’m still undecided,” he says.

On a typical day, Jeremy is out and about meeting with his clients. “Almost everything I do is digital so I could skip that, but I love getting out of the house and it makes my local clients happy.” As someone who enjoys eating healthy, meal prep is important — and he prepares his ahead of time for all of his workdays with his girlfriend.

“I feel 10 times better if I’m eating wholesome ingredients instead of fast food,” he says. “I don’t do this to save money.” On busier days, driving from client to client across the GTA and into the downtown core, sometimes he skips lunch due to time constraints.

For breakfast, it’s cereal and eggs prepared at home — another great money saver. Dinner is less predictable and he’ll typically go out once or twice a month to eat. More often he just has a sandwich at home.

On the weekend, Jeremy admits that he enjoys staying in. “I’m a homebody, so normally I’ll hang around the house, read the paper.” Occasionally when the weather is nice, he’ll hit the mall with his girlfriend or go for a walk downtown to have lunch with friends.

What he wants to know now is what to do with his money. “Buying a house seems mostly hopeless and right now I like the flexibility of not being locked into a mortgage,” he says.

We asked Jeremy to record his weekly spending. This is what he bought:

The advice. Jason Heath, managing director at Objective Financial Partners, reviewed Jeremy’s spending and had this advice to offer:

Jeremy seems to be doing a good job of avoiding the usual budget breakers of eating out and high real estate costs. The meal planning is smart for his savings plan, and his health. Also, living at home and paying modest rent may be great for now, but he’s entering his 30s and has a girlfriend, so real estate costs may rise in the future.

> Jeremy says his main goal is saving for retirement, but the main goals for a young person should probably include things like buying a home and starting a family, with retirement being secondary. This may impact where Jeremy saves — an RRSP or a TFSA — and how he saves as well. He may not want to save so much in his RRSP that he cannot access the funds for a down payment. The Homebuyer’s Plan limit for eligible tax-free RRSP withdrawals to buy a qualifying home was increased to $35,000 in the 2019 federal budget.

> Jeremy may need the bulk of his savings for a condo or home down payment, so his time horizon may be short to medium-term, and his risk tolerance for those savings should be low. It would be terrible to put all his money in stocks and experience a 20% market crash just before withdrawing his money to make a real estate purchase.

> Jeremy’s renting-versus-buying spreadsheet is a great idea, and one way to help people objectively assess a real estate decision. Some young people feel home ownership is the only way to create wealth, and it’s not.

> Renting in some neighbourhoods is cheaper on a relative basis than other neighbourhoods, and by extension, some neighbourhoods are better to be a landlord than others.

> As a freelancer, Jeremy would be wise to include a disability insurance policy in his budget. That way, if he becomes disabled and can’t work, his income will be replaced. Self-employed people need to find a place in their budget for their own benefits, since they are their own employer.

Results: Success! Spending in week 1: $416.97 Spending in week 2: $234.52

What he thought: “I admit, the challenge did make me more mindful,” Jeremy says after recording his spending for two weeks. He participated in the challenge during the holiday season, so he says that if his family thinks his Christmas gifts were cheap, they have the Star to thank. Also, it forced him to track on his spending in a more detailed way. “I love adding things into spreadsheets, but I rarely actually track every little thing. So this was a good exercise for that,” he adds.

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Take-aways: Jeremy was pleased with the financial advice, but says he’s more focused on the long-term. One factor he never considered before was insurance. “As a young guy with no kids or dependants, I thought it was a waste of money. But I think young people always believe they’re invincible, so disability insurance might be a good component of long-term planning,” he says.

Another piece of advice that he found interesting was the long-term average increases in housing values. Before the challenge, Jeremy was on the fence about buying a place or just saving for retirement. Now, he’s going to dig deeper on learning the housing market.

“From what I can tell, our current pace of price increases is mathematically impossible to sustain. Don’t believe me? The average home in Toronto is roughly $800,000. If we stay increasing by 15% a year for the average 25-year mortgage, the average home in Toronto will cost $26.5 million dollars. It just doesn’t make sense to me.”

Overall, with all this money talk, Jeremy says sometimes it’s worth it to just treat yourself. “I think it makes sense to treat yourself to a coffee out now and then. It doesn’t do much for the bottom line but it can brighten your day a bit.”

Are you a millennial living in Toronto or the GTA and need help with saving your money? Be a part of #MillennialMoney and email ekwong@thestar.ca

Digital design by Cameron Tulk.