When I went to journalism school in Ottawa, I rented a room in a house with four children. And then there were five more. And then it became six.
Friends and siblings came for visits that turned into extended stays. Bonus roommates – how awesome is this?
It was only a year for me, so it doesn’t matter. But I left feeling like I was permanently done with my roommates. Today this attitude is a luxury.
Season Eight of the personal finance podcast Stress Test for Gen Z and Millennials kicks off with an episode about the new roommate reality: Young adults in their late 20s and 30s who want roommates because the cost of living alone isn’t covered. They live together as.
Average rent for a one-bedroom apartment It reached $1,889 in SeptemberIt increased by nearly 10 percent compared to the previous 12 months. Meanwhile, the average hourly wage about 5 percent on an annual basis in September. We have been seeing rent increases outpacing salaries for months.
You may have heard of the old rule that housing expenses should make up 30 percent of gross income. This threshold needs to be raised to reflect today’s housing market, but let’s not ignore the danger of normalizing high housing costs. If you spend $40 to $50 of every $100 of your gross pay on housing expenses, you won’t have much left to save for short-term emergencies and long-term goals like buying a home or retirement.
Solutions to expensive housing, as in many cultures, include living with your parents until marriage. Moving to cheaper places also helps, but there’s a definite increase in the number of people living with roommates. Statistics Canada reported that households with roommates accounted for just 4 per cent of the total in 2021, but the growth rate was outstanding at 54 per cent.
It’s not just 20-30 year olds who live with roommates. Over the summer, I wrote about a network set up to help retired single women find affordable shared rented accommodation.
Lower housing costs could stem the growth in the number of people looking for roommates, but it’s unrealistic to expect big drops in rents or mortgage payments. High costs are the new normal in housing, and that means more people are living with roommates. Ten years from now, will only wealthy singles be able to live the solo lifestyle?
Subscribe to Carrick on Money
Are you reading this newsletter online or did someone forward you the email version? Then you can sign up for Carrick on Money here.
Rob’s personal finance reading list
Canada’s favorite credit cards
If you’re looking for a new credit card or want to see how your existing cards compare, check out: Canada’s Election 2023 winners Presented by RewardsCanada. Favorite cards from various categories voted by people like you. TD’s Aeroplan-connected Visa cards score well.
From owner to rent, without regrets
Woman having difficulty paying her mortgage sold his house and now he’s renting. “This is the best thing I’ve ever done for myself,” he said.
Want more TV?
If you’re in the mood to mix up your streaming services, check this out Comparison of Crave To Amazon Prime, Netflix, Disney Plus and more. Crave is expensive but has value.
Advice for managers
This newsletter has covered the difficult task of being the executor of a relative or friend’s estate several times recently. Here’s some welcome practical advice On how to deal with banks as an enforcer.
ask Rob
Q: There seems to be a lot of discussion about deferring Old Age Security and Canada Pension Plan benefits, but I haven’t seen any advice on how far in advance you should apply. My wife and I put off getting OAS for a few years, but finally decided it was time to start and completed the online application in June, expecting payments to begin shortly. No such luck. After waiting two or three months, we called the Service Canada hotline and were told that we would have to wait a 150-day processing time for our application, even though a record of our application was in the works. This appears to be standard for deferred OAS applications. If we had known this, we would have submitted our applications sooner and we recommend that people in a similar situation adjust their plans accordingly to avoid long delays in receiving their monthly OAS payments.
HAVE: I think readers approaching retirement will find this information helpful, so thank you for writing. In a recent column I wrote about starting CPP and OAS, there is a recommendation to apply for benefits three to six months before you want to start. Six months seems like a good rule of thumb to follow.
Do you have a question for me? Send it my way. Sorry, I can’t answer everyone individually. Questions and answers have been edited for length and clarity.
Tools, Explainers, Guides and Charts
If you are affected by the Underused Housing Tax, you must file a return and pay the tax by October 31st. UHT imposes a 1 percent tax on ownership of vacant or underutilized housing. Here is one overview Here’s an explanation of UHT from the federal government and newsletter From accountants at Andersen LLP.
Free Zone
I just finished the book stay true It was written by Hua Hsu and I thought a lot about it because it’s so smart and sad. The Pulitzer Prize-winning book tells the author’s memories of his college days and his friendship with a young man who was senselessly killed during a robbery. Next on my reading list is Colson Whitehead’s latest book. Fraud Manifesto. I loved the first part of this particular story arc, Harlem mix.
watch this
University of Calgary economics professor Trevor Tombe explains how high interest rates are harming young people most. I came to the same conclusion.
on social media
smart question about real estate investment From blogger and financial planner Robb Engen.
In case you missed these personal finance stories from the Globe and Mail
- Are you overwhelmed by all the negative news? You may need financial treatment
- Now more than ever is the time to get used to risky portfolios for education savings
- Are Canadians saving less for retirement?
- Five ways grandparents can help their grandchildren financially outside of contributing to RESPs
More Rob Carrick and money coverage
Subscribe to Stress Test: Apple Podcasts gold Spotify. Follow me for more money stories instagram And excitementand join the discussion my facebook page. Millennial readers, join us Millennial Money Facebook group.
Even more news from Rob Carrick:
- 🎧 Follow the Stress Test: Why millennials and Gen Zers are turning to Alberta for more affordable living • Rising interest rates have brought distress for new homeowners and opportunity for house hunters • Why more Canadians are choosing to remain childless or delay parenthood • Inflation timely love: How to manage rising costs while dating • You’re not bad with money – you suffer from money shame • Retirement may look different for Gen Z and Millennials. Here’s how to plan for it • Recession-beating tips on the job market, housing, investment and cost of living • Is the middle class dead for Millennials and Gen Z?
- ✔️Housing file: A house is not private. Get a good handle on the reality of homeownership • The good, the sad and the unaffordable: Saving for a down payment on a home in Canada’s big cities • Property taxes are skyrocketing in some cities – how worried should you be about other tax increases? • Our other real estate problem – people have too much wealth tied up in their homes • Here’s how borrowers and savers can time the eventual return of interest rates
- 📈 Investing: Canada’s best digital broker is TD Direct Investing with help from the TD Easy Trade app • 2023 Globe and Mail ETF buyer’s guide part one: Canadian stock ETFs • Freedom .08 ETF’ for the ultimate in cheap investing Check out Portfolio • Yes, bank deposits in Canada carry risks for the unwary and complacent. • CDIC covers bank deposits, but who protects your investments if your broker goes bankrupt? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the best investment products of all time for ordinary people • An investment strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your Money: Mortgage holders, savers and GIC investors, it’s time to change the way you think about interest rates • How much debt are each generation of Canadians carrying and how do you compare? • Young people should leave Toronto and Vancouver for the sake of their financial futures • This practical new spin on the savings account could take you away from your big bank • Rental fraud on the rise, with a rise in fake, falsified tenant applications • Are Canadians worse off financially than they were in the 1980s ? • From groceries to car loans, here’s how much it costs to live now. • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always increase with inflation? Not required • When the bank suggests you lock in your variable rate mortgage, there is an angle to it
