Rent in Toronto is expensive. That’s not exactly breaking news.
The average cost of renting a one-bedroom condo in the downtown core has cracked the $2,000 mark for a while now, making Toronto among the most expensive places to rent in the world – and the most expensive in Canada.
While the high prices can be jarring, it’s not exactly a shock to find out one of the world’s best places to live (according to numerous reputable rankings and livability indexes) and the country’s economic heart is also one of the most expensive for rent.
Now with all that said, if you’re renting in Toronto and paying all your bills, trying to save for the future can feel like an impossible juggling act.
Here are some tips to help.
Track your spending and create a sustainable budget
We’ve all experienced it — the urge to suddenly and radically overhaul our budget after seeing a larger-than-expected credit card bill, or spending too much on a night out, only for the motivation to quickly fizzle, and then for those old, bad habits to return.
The problem with these bouts of inspiration is they’re often reactionary and rarely sustainable.
To really set your money goals on track for long-term success, don’t start by blindly swearing off spending but rather by discovering how, where and on what you are spending your money. Tracking your daily purchases can shed light on the tiny expenses that add up over time and punch a hole in your wallet. It can also help curb impulses and unconscious spending, and increase your overall financial awareness. Plus, when it comes time to actually set a budget, you’ll know where to cap your maximum spending and what financial plan fits your lifestyle.
Don’t rent alone
Do you consider the freedom of living alone more of a priority or a preference?
Regardless of your stance, it’s important to realize the financial cost of deciding to go at it alone, because doing so can make several hundreds of dollars (if not thousands) of difference to your bottom line.
Aside from the obvious benefit of being able to split monthly rent with a roommate (or two), you’ll also save by sharing the load when it comes to household bills. However, you’ll want to tread carefully when deciding on who to room with and pick somebody who you know can reliably pay their fair share.
Buy in bulk and stick to a grocery list
Shopping for groceries and household essentials in bulk can be a great spending strategy. Not only will it help give the best return on your shopping list, pound for pound, but it can also help reduce the cost you spend commuting to the grocery store. Arguably, the best place for shopping in bulk is Costco. If you rent downtown or don’t own a car, you could also save by shopping from cheaper alternatives like No Frills. While neither Costco nor No Frills accept Visa or American Express, you can always opt for cash or use one of the best Mastercards in Canada to rack up valuable credit card rewards.
Along with buying in bulk, you’ll want to shop strategically by creating a grocery list to fend off the impulse to add random items to your shopping cart.
Automate your savings
By automating your savings, you’ll guarantee a consistent chunk of your paycheque is stashed away for the future. You won’t have to remember to transfer money between accounts or saving a different amount each month to accommodate for impulse purchases.
The best strategy is to automatically deposit a percentage of each paycheque (15% is a good benchmark) as soon as you’re paid into some kind of savings or investment account. Some of the best high-interest savings accounts in Canada, for instance, can earn you upwards of 2.5% in interest. Be strategic though. Before you start investing, make sure to build up an emergency fund and allocate some savings to pay off debts.
Save on eating out
While it may be convenient to bust out your phone, and have food delivered, that convenience comes at a cost. Pricier food options and extra delivery fees can really add up over the course of a week.
Stocking up on groceries and cooking is a far more cost-effective alternative. We recommend doing all your cooking prep on one day, like on a slow Sunday, to get it out of the way and to hold off eating out except for weekends. Plus, when you do eat out, consider sticking to just the main course and avoid ordering costly soft drinks, sides, and appetizers.
Take a second look at your recurring bills
First and foremost, cancel those subscriptions you’re not using.
Paying for both Apple Music and Spotify at the same time? Stick to just one. Paying for a monthly lifestyle subscription box filled with knick-knacks you rarely put to good use? Cancel it. And, do you really pay for both cable and Netflix? Consider just using the latter, or at the least, call your cable company to negotiate a better deal. In fact, negotiating a lower rate or shopping around for better deals is a strategy you should employ to save on everything from your cell phone plan, internet plan, to even your rental insurance policy.
When it comes to unavoidable expenses, like hydro, sometimes it’s the little things that make a big difference — like using the dishwasher during cheaper off-peak times of the week. Off-peak times do vary by season and power provider, but as of now, TorontoHydro’s off-peak times range from 7 p.m. to 7 a.m. on weekdays and all day on weekends.
Rejig your financial products
Do you pay a fee for a chequing account or carry a balance on a credit card with a high-interest rate? If so, you could save by making the switch to better alternatives. There are a number of free chequing accounts and low-interest rate credit cards, many of which are offered by equally trusted but lesser-known financial institutions than the big banks, which can save you hundreds every year.