Victoria Foundation’s 10th Anniversary Vital Signs Report came out this week. While 89 per cent of Victoria residents said they were happy, the cost of living was a concern, with 46 per cent ranking it as the number one issue in the city.
26 per cent of this year’s survey respondents felt overwhelming stress about their personal finances and 7 per cent couldn’t pay their rent or mortgage on time at least once in the past year. 23 per cent missed at least one bill payment in the 12 months preceding the survey. Victoria’s living wage also increased to $20.05/hour in 2015 although wages, of course, haven’t increased to this level.
Victoria Buzz spoke with Travis Koivula – Senior Advisor, Financial Planning and Advice with Island Savings – about this year’s cost of living findings and strategies to get by in our city.
1Track your spending and make a budget
All good things in personal finance flow from the golden rule of “spend less than you make.” However with Victoria’s high cost of living that means that families need to get creative. Start by tracking everything you spend in a full month and, after pinpointing areas of spending that can most easily be trimmed, create a reasonable monthly budget.
2Cook your own food
Victoria is known for its amazing restaurants, but all this eating out adds up to a major excess expense, especially for young people. Learning how to cook healthy, inexpensive meals at home is one of the best financial decisions you can make. Cook at home, pack your lunch.
3Get rid of that second car
Consider eliminating a second car if you have one – insurance, gas, payments and maintenance costs around $10,000 a year per car. Every little bit you can trim will help you put about 10% of your earnings away in emergency savings.
4Share a household
A home is a place to live and to raise a family, whether you rent or own or share accommodation with your extended family. Shelter costs tie up a substantial amount of your household income, so take your budget to your financial advisor to have a discussion about the pros and cons of renting vs. buying and how this decision should influence your investing behaviour. There has been a shift in the number of shared households within families where grandparents, children and grandchildren are all sharing the same roof – and this approach can help Victoria families manage their shelter costs (and potentially childcare costs as well).