FIRE Community Guest Interview #23 – A Single Mom’s Journey to FI

Here we are again with our next installment of the FIRE Community Guest Interview Series!  

For anyone new here, this interview series will cover people within the FIRE community who are on their way to becoming financially independent, have already reached financial independence, or who have retired early. If you are reading this and you are financially independent, retired early, or close to reaching these major financial milestones, please reach out to us! You can check out the previous FIRE Community Guest Interviews here.

Today, we have the pleasure of having a fellow Canadian momma join us to share her journey to FI. What makes her story unique is that she is a single mom!  And immigrated to Canada from another country!  So for all the single folks out there saying FI is not possible, here’s your match as she has a kiddo to boot!  Incredible.  She prefers to remain anonymous so we will call her “SMJ”, short for her Instagram handle @SingleMoneyJourney.  

I hope you appreciate these responses as much as I do and hope you can relate to these guest interviews in some sense to see that there is no cookie-cutter way to FI. If you have any follow up questions or would like to get in touch with SMJ, please either reach out to her on Instagram or leave a comment below! Without further ado, take it away SMJ!

---

1. Can you give us a little background of who you are, what you do, and how you became interested in personal finance? How did you discover the idea of financial independence?

I am a lot of things; what I want to identify with in the personal finance space is a woman, a single parent, an immigrant to Canada. I work in healthcare and get great satisfaction through mentoring students, new graduates and immigrant professionals.

I became aware of personal finance when I was preparing for my maternity leave. Canada has many social support programs, paid maternity leave being one of them. I was eligible to receive employment insurance (EI) at the maximum level, which was a rude awakening to me as it was a significant reduction to my income at that time.The expenses I had up until that point were going to be way above my income coming in from EI. I made some very logical decisions at that time. I sold a car with a monthly car payment over $500 and managed to get about $2,000 extra from the sale compared to what I owed. I rented out my condo to cover mortgage costs and moved to a lower cost of living area closer to family. I had a renovation loan and credit cards that I was paying on during this time. I got by during maternity leave and didn’t dig any deeper into debt. 

When I returned to work and my income rose, I hadn’t learnt my lesson. I got rid of all my credit cards in about 2016 because I just wasn’t getting any traction, I consolidated my debts, credit cards, and renovation loan which lowered my interest payable and I was consistent about paying it off. It wasn’t till 2018 when I finally found a way forward. I was off work due to medical issues and was again on a reduced income, I had a huge lawyer bill due, over $50,000 and very little saved for my future. Earlier that year I had experienced my debit card being denied at a grocery store while out of town the day before shops closed for four days over Easter. I had to put food back on the shelf and buy only enough food for those four days. It was scary, I had my child with me and I felt so helpless in that moment.

I made good use of my time away from work and went down many personal finance rabbit holes. A friend kept talking about Dave Ramsey so I watched a few debt free screams, listener call ins, and talked through the baby steps in real time with my friend. 

I had a lawyer bill and a car payment at this point, I’d managed to pay off my consolidation loan and didn’t have credit cards. I made a plan and within a year I had both of my remaining debts paid off. While I was paying off my debt I was gaining inspiration from various accounts on Instagram and setting myself up for what to do once I was debt free. That is when I found FI/RE and discovered that I could retire earlier than 65 and likely by the time my kid finishes high school.

2. When in your journey did you realize financial independence was actually possible?  Was that the original goal at the beginning?

Time on Instagram in the debt free community, FI/RE community, podcasts, books, and blogs helped me realize very early on that if I switched the amount I was sending to debt to investments an early retirement would be possible. Every time someone would post their savings rate and projected timeline to FIRE I’d run my numbers and see if I could do it too, every time there were blog posts on numbers, withdrawal rates, savings rates, I’d consume the information and re-run my numbers. The amazing thing was no matter the numbers I was running based on my life it always came back successful – I could retire early! 

My first goal, and I guess current goal is to be in a position to retire when my kid is done with school. For me that means I can create my life exactly how I want it to look – beaches rather than snow for one! Right now I am coast FI, in that I wouldn’t need to contribute any more money and could retire at 65. That gives me so much confidence to actually make decisions related to my finances rather than feel cornered into a situation because I just can’t see another way.

3. To help put things into context, if you are comfortable sharing some numbers, what is your savings rate, FIRE number, net worth, salary, how many hours a week do you work, etc?  How long have you been working towards financial independence and where are you today? 

• savings rate 42% pre tax and 54% post tax
• FIRE number $1 million
• Net Worth $335,000
• Currently unemployed
• Work hours – typically full time 37.5 hours a week, reduced to part time 37.5 hrs per two weeks during the pandemic due to school and childcare closures.

I have actively been pursuing FIRE since December 2019 when I made my first $1,000 contribution to my self directed RRSP. I’m currently 33.5% of the way to my goal.

4. Do you feel deprived?  Do you feel like you are sacrificing and missing out on life?  How would you say your mindset has shifted throughout your FI journey?

What makes me feel deprived is not being able to travel to see family internationally, that has nothing to do with my journey to FIRE and everything to do with a global pandemic that has shut international borders for multiple years. I budget and live my life to things that make sense to me, travel, time outdoors, sports equipment to get through long winters, camping.

As I have pursued my personal FIRE journey I have been able to learn from many people online. My mindset has shifted back to my spunky confident 17-20 year old self who gave no mind to what others said or thought about my choices whether it was where to go to university, what to study, travelling alone, spending exorbitantly on live music – I simply didn’t care! Somewhere in life that changed when I was in tears thinking everyone around me was moving on with life – marriages, kids, houses – and I didn’t fit the picture of a young professional anymore. I have tapped back into living my life for me. It doesn’t matter where I live, I have a house that is affordable and provides shelter. It doesn’t matter what car I drive, I have a reliable car that is safe, paid off, and economical on petrol. It is truly knowing that my life is mine to live and I am the only one that gets to question if my choices align to my calluses. Man, have I missed 17 year old me for her confidence! 

5. What do you spend your money on and what don’t you spend your money on? What brings you happiness and joy? How much money do these things cost? 

My top budget categories for 2021 were investments, housing, daycare, food and gifts. In 2019 they were debt, housing, holiday, daycare, food. 

The lowest spend is stuff – as in wants for myself, my child, and the house. I just don’t spend on stuff that won’t last, stuff that doesn’t have a purpose, and stuff that just fills up my house. I also don’t spend on clothing – my sister and I swap clothing for ourselves and our kids when we see each other. I typically buy used clothing for my child, as kids grow so fast the cost of new becomes outrageous. I also don’t spend on coffee or going out to eat. I don’t drink coffee so there were no habits to change there, and when I look back on my “dining out” spending for earlier years, it was all fast food. I can plan and cook at home, the expense of fast food just isn’t worth it to me anymore.

I am happiest in my hammock in the afternoon sunshine listening to an audiobook from the library or talking to my family online. As far as cost goes, my hammock was a gift, afternoon sunshine is free, west facing backyard – cost of mortgage, access to free audiobooks – city rates, talking to family – cost of internet.

At the moment it costs me nothing to enjoy a long summer afternoon/evening in my hammock. If you wanna get picky it costs me something, but I’d have those costs no matter where I lived.

6. What are some of the more unique/uncommon ways you’ve cut down costs?

I don’t think that I have done anything truly unique to cut costs, I live in a condo rather than a house which halves the purchase price and subsequent mortgage. I drive a car rather than an SUV or truck which is the Saskatchewan norm again at half to one third the cost. I volunteer at events to get free passes.

In 2021 I purchased a house with a ready to use basement suite. From that purchase I have been able to house hack and have drastically reduced my personal housing costs as the rent from my basement suite allows me to live in a wonderful neighbourhood for $400 a month.

7. Do you use a budget?  Do you track your expenses? Do you track your net worth? If so, how often do you update these?

YES, YES, YES! I use a budget each and every month, I currently use the Goodbudget app and have done since 2017. I track my expenses daily in my Goodbudget app. I track my networth monthly on a self made google sheet.

8. As a single parent, how has that impacted your finances and your timeline to FI? 

As a single parent, there is no back up. Most single parents feel this when it comes to provision of child care, getting kids to activities in time, juggling work and family demands. There isn’t anyone to pull in to help with no questions asked.

As a single parent the financial aspect makes me realize that I have to have my finances in order so my card isn’t declined at the grocery store ever again, so that I can say yes to the activities that bring joy to my child and myself without worrying about how it will be afforded. 

I’m pursuing FI so that I will not be a financial liability to my child in my later years. I am pursuing FI so that I can teach my child financial literacy, financial stability, and financial responsibility.

Being a single parent means that some of the options for cost savings are off the table – house hacking to reduce housing costs, though Sarah at @nerdsguidetofi is flipping the script on that and I followed in 2021 and have been extremely happy with the decision. I don’t have as much flexibility with where I can live or work so moving to a lower cost of living area or an area with a better job market isn’t feasible given custody arrangements. 

I think as a single parent I am committed to FI for not just myself, but the future I can give my child too. FI is bigger than me.

9. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?  Conversely, any cons?  

Canada is my second home, Australia is my first. Both countries are first world, commonwealth countries that share more similarities than differences. Specific advantages to being in Canada the big ones that come to mind are health care and social support through EI. I don’t think I have spent more than $100 a year on healthcare (physiotherapy, massage, optometrist, MRI, ultrasound, glasses, contacts, neurologist, gynecologist, dentist, prescriptions) in all the years I have lived in Canada, in part due to a public healthcare system and in part due to benefits provided by my employers. Social supports I have accessed on a number of occasions are employment insurance for periods of time when I was unable to work through injury, and the one year maternity leave.

I live in Saskatchewan, so my cost of living related to housing, transportation, and insurance is going to be considerably lower than the other major Canadian cities. I trade that for farmers fields, and flat straight drives.

Retirement investing is not mandatory in Canada while in Australia superannuation contributions are mandatory at a certain point.

10. On a similar note, being that you are originally from Australia and now in Canada, can you explain some of the differences to living in both countries?

One of the biggest differences that I personally notice between Australia and Canada is the existence of parallel public and private sectors in healthcare and education. Both which give the consumer more choice. There is also pharmacare in Australia that Canada is trying to implement with the NDP. 

Typically Australians drive smaller cars than I see on a daily basis here in Saskatchewan. I have stuck with a small car and am thankful to now be driving a paid off car with great fuel economy.

There are the obvious differences in weather and actual winters in Canada but many people enjoy getting outdoors, enjoying company of friends, and exploring nature.

11. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?  Has your investment strategy changed over the years? 

I have been investing in self managed funds since December 2019. I have been investIng into index funds consistently since then – a mix of US, international and what I like to call “home country” (I lump both Canada and Australia into this). I do not own any individual stocks and will likely begin to consider this when I have filled up my taxed advantaged TFSA and RRSP accounts. When I move to a taxable brokerage account, Canadian dividend income is taxed favourably in Canada, whereas Australian stocks get better treatment in Australia through franking credits, what I choose to do will have more to do with where I plan to retire.

My investment strategy has changed as far as an adjustment to what I was holding in my superanuation, LIRA, and pension accounts to invest into index funds rather than default investment mixes. 

I have two rental suites and am working on paying down those rentals to have this as a source of income in early retirement.

12. Do you take advantage of tax advantaged accounts offered to you?  If so, which ones and how so?  Do you have a game plan to be able to withdraw from these funds when the time comes? 

Yes, but I’m late to the game. When I first came to Canada, I didn’t understand the accounts, didn’t have anyone to explain them to me, and to be honest never asked about them. I also didn’t know how long I would be in Canada for so I wasn’t sure how investments in Canada would be treated in Australia or how they would be treated as a permanent resident versus citizen. I still may not have all the answers but I do know I will be in Canada for the foreseeable future, and I have considerable contribution room.

I currently hold a RPP from my most recent employer which I will rollover to the appropriate self directed account when the transactions are settled.

I have a LIRA from a previous pension.

I have an RRSP and a TFSA.

I am currently working on filling up my existing RRSP contribution room. I made the decision to contribute to my RRSP over my TFSA first based on my current tax bracket, withdrawal order, potential OAS clawbacks in retirement, and lack of flexibility when an RRSP gets converted to a RIF.

Stephanie over at @prescriptions_and_paycheks inspired me to map out my drawdown strategy, and it may well change in the future but right now it looks like this:

• LIRA and RRSP
• Superanuation – age 60
• OAS/CPP – start age 65 to 71, likely 71
• Empty LIRA/RRSP by 71 to avoid fixed withdrawal schedule (RRIF)
• Brokerage
• TFSA

13. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?  Are you a fan of the “4% rule” or something else?  Why?

I’m currently aiming for the 4% rule for setting up my FI number and knowing an amount to live on each year. 

14. What are your post-FIRE thoughts/plans regarding health coverage?  As a reference, what do you currently pay annually or monthly for health related costs (be it insurance, co-pays, deductibles, etc.)? What do you estimate your post-FIRE health costs to be per year?

Being both Canadian and Australian, health coverage isn’t top of mind, other than having adequate travel insurance.  I’d currently estimate less than $100 per year in current health costs. I am going to estimate that my post FIRE health costs won’t be too significant. I suspect there will be some one off items like travel related vaccinations, anti malarial drugs and the like. But in terms of overall health costs I’m not expecting much. My grandmother lived a long life and was on only two medications at the time of her death, she lived at home until the day she died. My parents are alive and well, enjoying retirement with no health concerns. I’m hoping for good genetics to come through that will mean I am not suffering with a chronic medical condition. 

End of life can be expensive if long term care is required, the pandemic has highlighted the discrepancy of living situations in various long term care facilities across the country and unfortunately you get what you pay for. Current costs of LTC are in the $3,000-$5,000 range in my area so anticipating $10,000 a month is not going to be too big of a stretch. I want to be in a financial position where the cost of care is not the deciding factor.

15. As a parent, have you found that having children has greatly delayed your timeline to FIRE?  How much money have you spent on your child per year?  What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?  Do you have a RESP account open for their post-secondary education?

I came to FIRE as a parent so I can’t really say that having a child slowed me down, I’d actually say that having a child made me plan for my future and find a way to be financially independent. I believe that I will achieve FIRE in about 10 years given my current situation, which is fairly average for a single person I would guess. People who achieve FIRE sooner (5 years or so) are often doing so with two incomes, major house hacking, or really high incomes.

I’ve tracked spending since 2017, I track spending for my child as want, need, activity, school. In 2020 I spent $5,865 including over $4,500 in daycare costs. 2019 $8,157 including over $7,209 in daycare costs. 2018 $8,885 including over $7,500 in daycare costs. 2017 $10,106 including over $7,700 in daycare costs.

The biggest cost related to having a child for me is hands down daycare. As a single parent with no family support, I can’t get by without it. Aside from that specific individual “big ticket” item, I bought my kid private swimming lessons and winter clothing. Swimming is a life skill and we live on the prairies so waterproof and warm winter clothing is a non negotiable for me! When I look back over the spending over the last four years there are very few transactions that are over $50 and most are offset by reselling the toys and clothes that have been outgrown.

What I did spend money on in my kids first year of life was baby wraps, I fell hard and fast into that rabbit hole. Some were pricey but the connection from carrying my baby everyday during the first year and sporadically up to five (mainly when travelling at that point) is priceless. 

I cloth diapered so didn’t spend on disposable diapers which was a big cost saving. I spent $100 on a cloth diaper set from a friend who never used it and then I passed the kit to my sister, then sold it when we were both done.

I do have an RESP account for my child. This was so important to me that I opened it within 6 weeks of my child’s birth. It took 6 weeks because I had to wait for their birth certificate and social insurance number to be issued! Despite being on maternity leave with a real drop in income that saw me sell a car I couldn’t afford, I was committed to funding education for my kiddo. Initially I set it up to contribute fortnightly for a number of years then in 2018 I shifted over to a self directed account and have been contributing the $2,500 as a lump sum as early in the year as I can, this year was January.

What I really love about the RESP is that it is actually quite versatile with what the money can be used for. It is not restricted just to university in Canada, it can be anywhere in the world. It is also very open with shorter courses that also qualify to use the savings.

16. If you could go back in time and change things, what would you have done differently?

Once I committed to being debt free and then making good financial decisions by pursuing FI, I haven’t looked backed. I am continuing to learn about investments, drawdown options, and real estate. In my journey from 2017 to now I wouldn’t change anything. Prior to 2017 I’d hold off on buying my condo (I bought it for all the wrong reasons). I have very little equity in it as prices are dropping or flat for condos in my area, but I have a safe place to live that I can comfortably afford.

17. Has discovering financial independence changed how you view your job and life overall? 

Absolutely! During COVID-19 my industry was forced to be closed for 6 weeks, then schools closed and I was unable to work full time. Having become debt free at the end of 2019 meant that I had very few monthly financial payments to make. It was the discipline that I had learned in 2019 that set me up to be successful in 2020, purchasing a house with a rental suit in 2021, and taking 6 weeks off unpaid in 2022. It was the books I had read that reassured me that investing was for the long term. So despite the volatility of 2020-2022, I invested every single month since 2019 and had no apprehension. 

2021 has led to unemployment for me and being in the position of deciding between a 20% pay cut or leaving. I was so secure in my financial decisions, situation, and plan that walking away was the better financial decision for me. Whereas “2018 me” would have felt no choice but to take a guaranteed job for 20% less pay and be miserable every day. I’m now in a position where I can look at small contract opportunities or part time work while I secure the job that works for me.

18. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?  If so, how did you bring it up and what were their reactions?  If not, why not?  Why do you struggle with this conversation and why do you feel that money is such a taboo topic?  

I have one great friend that I talk about money with nearly every time we talk. They are working through debt pay off, and setting up financial priorities as a couple and I’m a small step ahead with investing. That friend sure does know about my planned retirement date. 

I mentioned my planned retirement date to another friend as they were talking about their early retirement date with pension and it is the same year. I’m a handful of years younger so it took a little explaining how it would be possible.

My mum is absolutely aware and I try to convince my sister to consider it, but no luck yet.

My retirement date is currently tied to my child’s schooling. It is a nice clean point in time to be aiming for that will allow me to pause, leave, and live my life.

19. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence? 

Find the people in the personal finance space that resonate with you and see what you can replicate. You don’t need to reinvent the wheel, people have done it before you, learn from them and make your journey uniquely yours. 

20. What does the word ‘success’ mean to you?

I think it changes all the time. If I consider success in terms of FI it is going to be the point in time that I have no financial stress, can make choices for joy not money and living a life I love while enjoying my journey.

21. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?

Books: Your Money or Your Life, The Simple Path to Wealth, and The Barefoot Investor

Podcast: Explore FI Canada

22. How can people get in contact with you? 

I’m most active on Instagram @singlemoneyjourney

---

Great responses, SMJ! Here were my key takeaways from this interview:

• It’s wild to me that in less than 3 years SMJ has gone from various forms of debt to 33% of her FIRE goal.  Absolutely incredible and it shows how if you are dedicated and determined, you can do this.
• I love how SMJ highlights the power of social media.  By being purposeful with who you follow, social media really can improve your life.  I love how she took action whenever someone posted a net worth update, savings rate report, etc she dug into her own numbers to see how her progress was doing as well.
• We all need to embrace our 17 year old “I do what I want” attitudes!  You do you.
• “I am happiest in my hammock in the afternoon sunshine listening to an audiobook from the library or talking to my family online.” A simple life really is a happy life.
• It’s so powerful to see that being a single parent is part of the impetus for SMJ’s desire to reach FIRE as she’s doing it not only for herself but for her child too.  This reminds me of my student loans in a sense.  Having this burden turned into a drive to want to become debt free and started my savings mindset.  While some may see being a single parent as a deterrent to ones goals, SMJ is instead using it as a motivating factor to help reach her goals.
• It wild to see the daycare costs for her kiddo but also incredible to see the very low amount of spend for everything else kid related.  When removing daycare, it looks like SMJ is spending anywhere from $1,000-$3,000 on kiddo per year which is quite impressive.

Thank you again SMJ so much for being a part of our FIRE Community Guest Interview Series, we really do appreciate it! In our next FIRE Community interview, we’re staying in Canada (again!) with one of my favourite commenters on our blog who will share his journey to retirement. 

Did you enjoy this interview? Any thoughts or additional questions for SMJ? Please let us know in the comments below

Thanks for tuning in and check back next month for the next interview.

We love highlighting other members of the FI community. Please contact us if you’d like to be a part of the FIRE Community Guest Interview series and we’ll see if we’re a good fit!

And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!

• FIRE Community Guest Interview # 1 – Empowerment Through FIRE
• FIRE Community Guest Interview # 2 – We Quit Our Jobs To Retire Early & Travel The World
• FIRE Community Guest Interview # 3 – Dividend Investor Reached FI By Living An Intentional Life
• FIRE Community Guest Interview #4 – Pursuing FIRE With Multiple Passive Income Streams in Australia
• FIRE Community Guest Interview #5 – Driving to FIRE Through RV Living
• FIRE Community Guest Interview #6 – From High School Drop Out to Retired at 35
• FIRE Community Guest Interview #7 – Medical Professional Family With 3 Kiddos In The Pursuit of FIRE 
• FIRE Community Guest Interview #8 – Calculated Engineer Family Utilizing Geo-Arbitrage to Reach FI
• FIRE Community Guest Interview #9 – Lessons from a Fimigrant – Let Experience Be Your Teacher
• FIRE Community Guest Interview #10 – From Entrepreneur Making $36,000 to Multi-Millionaire In His 30s
• FIRE Community Guest Interview #11 – Hybrid Dividend and Index Investor Who’s Mastering the FI Mindset
• FIRE Community Guest Interview #12 – Proving Financial Independence Is Possible With Kids In A High Cost of Living Area
• FIRE Community Guest Interview #13 – Making An Impact On The Way To FI
• FIRE Community Guest Interview #14 – Badass Momma Knows Her Worth And Became A Millionaire At 36
• FIRE Community Guest Interview #15 – PhD Couple Reached FI at 40
• FIRE Community Guest Interview #16 – Mindful Minimalist Family
• FIRE Community Guest Interview #17 – FIWOOT: Financial Independence Work On Own Terms
• FIRE Community Guest Interview #18 – French Expats Growing Their Real Estate Empire in the US and France
• FIRE Community Guest Interview #19: Money Savvy Teacher With 9 Properties
• FIRE Community Guest Interview #20: Canadian Expat Supercharging His Family’s Path to FI In the Middle East
• FIRE Community Guest Interview #21: Young Retired Couple Have Mastered The FIRE Lifestyle
• FIRE Community Guest Interview #22: Building Multiple Income Streams To Design Their Dream Lifestyle

Sharing is caring!