Can a 26-year-old Toronto sous chef make $40,000 alone?

Millennial Money is a weekly submission-based series that provides financial advice to millennials. Read the full series here.

At 26, Jocelyn spent four years working his way from dishwasher to sous chef at a Toronto restaurant. Now she makes about $40,000 a year and lives comfortably — going out for drinks and dinner — while paying no rent.

“I was chilling because I lived at home, saving money and just paying off student debt,” she said.

But now she faces a major – and quite immediate – change.

“My parents have told me they plan to sell their house by the end of the year, and I’ll have to find my own house,” Jocelyn said, adding that she was stressed about her situation.

Because she has worked hard to make a profit in the restaurant, she doesn’t want to leave – she feels comfortable after her years of experience there.

However, since it’s in downtown Toronto, she’ll probably have to find her own place as her parents are considering moving north.

“I’ve never thought about my money like that. Now I have to consider places to rent that still bring me downtown,” she said.

Because of all the costs she’s saved on housing and the easy access to public transportation that she’s loved to take her from her parents’ house to downtown for work, she admits she tends to spend money. to give.

“I work in a restaurant as a sous chef, I can usually eat at work. But also because I’m in this industry, I often go out to eat and drink with colleagues and friends when I have a day off,” Jocelyn said.

On the nights she chooses to stay out late, she opts for Uber at home, which costs just over $25 per ride.

“I almost never refuse an appointment for dinner or drinks and I also go out after work,” she said. “I’ll have to change that if my parents want to sell our family home.”

So far, Jocelyn has $2,000 in a savings account. She also has no debts, but with the looming prospect of renting alone in the city, she wants clarity.

“Do I live with a roommate? Where is it accessible?”

We asked Jocelyn to share a week of expenses to get a sense of her finances.

The expert: Jason Heath, director at Objective Financial Partners Inc.

Jocelyn has been able to pay off her student debt by living at home with her parents, but that is about to change. They have informed her that they plan to sell their house before the end of the year and that she will have to move.

She has managed to save $2,000 but will need much more to pay the first and last month’s rent and also an emergency fund. She thinks she might need a roommate. I think the best she can do is try to prepare a reasonable budget.

According to Statistics Canada’s latest survey of household spending, the top three household expenses were housing (29 percent), transportation (19 percent) and food (15 percent). Jocelyn does not have a car and uses public transportation, so her transportation costs are relatively low. At the moment she does not pay rent and her parents do their shopping. So she can expect her monthly expenses to increase significantly if she moves.

Assuming she stays in North York, reports that the average rent for a one-bedroom apartment there is $1,781 per month as of May. For a two-bedroom, the rent averaged $2,367. So if she’s sharing a two-bedroom with a roommate, she might be able to cut her rent by about a third, or nearly $600 a month. There are other fixed costs such as renters insurance, internet and other miscellaneous costs that can be lower if shared.

It’s worth noting that Jocelyn’s $865 per month cost suggests she should be saving about $1,400 per month based on her after-tax income. Since she just finished paying off her debt, she may have that much extra each month. But looking at a person’s after-tax income and actual monthly savings (or lack thereof) could be the best test of what you’re spending. People tend to drastically underestimate how much money they spend.

Even if Jocelyn now has an extra $1,400 each month, she may have a hard time affording rent and food without serious changes in her other expenses or her income. She hopes to get a promotion and a corresponding increase in income, but failing that, moving will require a change in her money habits. The sooner she gets used to those changes and reduces her spending to increase her savings while still at home, the better prepared she will be to move.

Results: She spent less. Week 1: Spend $419.50 Week 2: Spend $366.50

How she thinks she did it: Reading all this, Jocelyn said she feels “nervous” as her parents continue to remind her of their plans.

“I realize they think I had it too easy compared to my brother, so I’ll have to figure things out,” she said.

Take away food: If there’s one important thing that stands out, it’s that she will have to drastically change her lifestyle.

“When you work in the food industry, you constantly see people eating, drinking and enjoying food as we work at a fast pace in a hot kitchen,” Jocelyn said. “That’s why there are so many temptations to go out for a drink or something to eat, because we see it as a time to relax.”

To make the necessary changes, she will do her best to run errands at her parents’ house while she is still there to prepare her breakfast, as well as lunches and dinners when she is not at work.

“I want to have a better idea of ​​how much all this extra stuff will cost. I realize it’s not just about rent, it’s about so much more,” she added.

With Heath’s breakdown, Jocelyn now considers finding a place with roommates.

“I don’t mind doing that if it means I can get to work at an efficient time,” she said, adding that if she can’t find anything close or within walking distance of her work, she’ll consider moving on to move west or east. as long as she’s near a subway station.

In the meantime, she will continue to work hard to get a promotion, spending her days off looking for rental properties instead of going out for drinks.

“Learning to say no will be difficult, but it is necessary if I want to be independent.”

Are you a millennial living in Toronto or the GTA and need help saving your money? Be part of #MillennialMoney and email [email protected]
Digital design by McKenna Deighton. Evelyn Kwong is a journalist based in Toronto. Follow her on Twitter: @evystadium