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,\u00a0<\/span>please reach out to us!<\/span><\/a>\u00a0You can\u00a0<\/span>check out the previous FIRE Community Guest Interviews here<\/span><\/a>.<\/span><\/p>\n 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!\u00a0 And immigrated to Canada from another country!\u00a0 So for all the single folks out there saying FI is not possible, here’s your match as she has a kiddo to boot!\u00a0 Incredible.\u00a0 She prefers to remain anonymous so we will call her “SMJ”, short for her Instagram handle @SingleMoneyJourney<\/a>.\u00a0\u00a0<\/span><\/p>\n 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<\/span> comment below! Without further ado, take it away SMJ!<\/span><\/p>\n 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?<\/strong><\/p>\n 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.<\/span><\/p>\n 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\u2019t dig any deeper into debt.\u00a0<\/span><\/p>\n When I returned to work and my income rose, I hadn\u2019t learnt my lesson. I got rid of all my credit cards in about 2016 because I just wasn\u2019t 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\u2019t 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.<\/span><\/p>\n 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.\u00a0<\/span><\/p>\n I had a lawyer bill and a car payment at this point, I\u2019d managed to pay off my consolidation loan and didn\u2019t 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.<\/span><\/p>\n 2. When in your journey did you realize financial independence was actually possible?\u00a0 Was that the original goal at the beginning?<\/strong><\/p>\n 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\u2019d run my numbers and see if I could do it too, every time there were blog posts on numbers, withdrawal rates, savings rates, I\u2019d 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!\u00a0<\/span><\/p>\n 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\u2019t 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\u2019t see another way.<\/span><\/p>\n 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?\u00a0 How long have you been working towards financial independence and where are you today?<\/strong>\u00a0<\/span><\/p>\n I have actively been pursuing FIRE since December 2019 when I made my first $1,000 contribution to my self directed RRSP. I\u2019m currently 33.5% of the way to my goal.<\/span><\/p>\n 4. Do you feel deprived?\u00a0 Do you feel like you are sacrificing and missing out on life?\u00a0 How would you say your mindset has shifted throughout your FI journey?<\/strong><\/p>\n 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.<\/span><\/p>\n 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\u2019t 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\u2019t fit the picture of a young professional anymore. I have tapped back into living my life for me. It doesn\u2019t matter where I live, I have a house that is affordable and provides shelter. It doesn\u2019t 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!\u00a0<\/span><\/p>\n 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?\u00a0<\/strong><\/p>\n My top budget categories for 2021 were investments, housing, daycare, food and gifts. In 2019 they were debt, housing, holiday, daycare, food.\u00a0<\/span><\/p>\n The lowest spend is stuff – as in wants for myself, my child, and the house. I just don\u2019t spend on stuff that won\u2019t last, stuff that doesn\u2019t have a purpose, and stuff that just fills up my house. I also don\u2019t 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\u2019t spend on coffee or going out to eat. I don\u2019t drink coffee so there were no habits to change there, and when I look back on my \u201cdining out\u201d spending for earlier years, it was all fast food. I can plan and cook at home, the expense of fast food just isn\u2019t worth it to me anymore.<\/span><\/p>\n 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.<\/span><\/p>\n 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\u2019d have those costs no matter where I lived.<\/span><\/p>\n 6. What are some of the more unique\/uncommon ways you\u2019ve cut down costs?<\/strong><\/p>\n I don\u2019t 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.<\/span><\/p>\n 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.<\/span><\/p>\n 7. Do you use a budget?\u00a0 Do you track your expenses? Do you track your net worth? If so, how often do you update these?<\/strong><\/p>\n 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.<\/span><\/p>\n 8. As a single parent, how has that impacted your finances and your timeline to FI?\u00a0<\/strong><\/p>\n 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\u2019t anyone to pull in to help with no questions asked.<\/span><\/p>\n As a single parent the financial aspect makes me realize that I have to have my finances in order so my card isn\u2019t 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.\u00a0<\/span><\/p>\n I\u2019m 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.<\/span><\/p>\n 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<\/a> is flipping the script on that and I followed in 2021 and have been extremely happy with the decision. I don\u2019t 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\u2019t feasible given custody arrangements.\u00a0<\/span><\/p>\n 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.<\/span><\/p>\n 9. As a FI member living in Canada, are there any pros to living in Canada specifically that have helped you along your journey?\u00a0 Conversely, any cons?\u00a0\u00a0<\/strong><\/p>\n 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\u2019t 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.<\/span><\/p>\n 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.<\/span><\/p>\n Retirement investing is not mandatory in Canada while in Australia superannuation contributions are mandatory at a certain point.<\/span><\/p>\n 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?<\/strong><\/p>\n 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.\u00a0<\/span><\/p>\n 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.<\/span><\/p>\n 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.<\/span><\/p>\n 11. What is your investment strategy? Do you invest in index funds, dividend stocks, real estate, other businesses, etc.?\u00a0 Has your investment strategy changed over the years?<\/strong>\u00a0<\/span><\/p>\n 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 \u201chome country\u201d (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.<\/span><\/p>\n 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.\u00a0<\/span><\/p>\n I have two rental suites and am working on paying down those rentals to have this as a source of income in early retirement.<\/span><\/p>\n 12. Do you take advantage of tax advantaged accounts offered to you?\u00a0 If so, which ones and how so?\u00a0 Do you have a game plan to be able to withdraw from these funds when the time comes?\u00a0<\/strong><\/p>\n Yes, but I\u2019m late to the game. When I first came to Canada, I didn\u2019t understand the accounts, didn\u2019t have anyone to explain them to me, and to be honest never asked about them. I also didn\u2019t 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.<\/span><\/p>\n 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.<\/span><\/p>\n I have a LIRA from a previous pension.<\/span><\/p>\n I have an RRSP and a TFSA.<\/span><\/p>\n 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.<\/span><\/p>\n Stephanie over at @prescriptions_and_paycheks<\/a> inspired me to map out my drawdown strategy, and it may well change in the future but right now it looks like this:<\/span><\/p>\n 13. Speaking of withdrawals, what is the withdrawal rate you plan to use when you withdraw from your portfolio?\u00a0 Are you a fan of the \u201c4% rule\u201d or something else?\u00a0 Why?<\/strong><\/p>\n I\u2019m currently aiming for the 4% rule for setting up my FI number and knowing an amount to live on each year.\u00a0<\/span><\/p>\n 14. What are your post-FIRE thoughts\/plans regarding health coverage?\u00a0 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?<\/strong><\/p>\n Being both Canadian and Australian, health coverage isn\u2019t top of mind, other than having adequate travel insurance.\u00a0 I\u2019d currently estimate less than $100 per year in current health costs. I am going to estimate that my post FIRE health costs won\u2019t 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\u2019m 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\u2019m hoping for good genetics to come through that will mean I am not suffering with a chronic medical condition.\u00a0<\/span><\/p>\n 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.<\/span><\/p>\n 15. As a parent, have you found that having children has greatly delayed your timeline to FIRE?\u00a0 How much money have you spent on your child per year?\u00a0 What were some of the bigger costs that were worth it and what were some of the bigger costs that were not worth it?\u00a0 Do you have a RESP account open for their post-secondary education?<\/strong><\/p>\n I came to FIRE as a parent so I can\u2019t really say that having a child slowed me down, I\u2019d 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.<\/span><\/p>\n I\u2019ve 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.<\/span><\/p>\n The biggest cost related to having a child for me is hands down daycare. As a single parent with no family support, I can\u2019t get by without it. Aside from that specific individual \u201cbig ticket\u201d 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.<\/span><\/p>\n 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.\u00a0<\/span><\/p>\n I cloth diapered so didn\u2019t 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.<\/span><\/p>\n 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\u2019s 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\u2019t 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.<\/span><\/p>\n 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.<\/span><\/p>\n 16. If you could go back in time and change things, what would you have done differently?<\/strong><\/p>\n Once I committed to being debt free and then making good financial decisions by pursuing FI, I haven\u2019t looked backed. I am continuing to learn about investments, drawdown options, and real estate. In my journey from 2017 to now I wouldn\u2019t change anything. Prior to 2017 I\u2019d 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.<\/span><\/p>\n 17. Has discovering financial independence changed how you view your job and life overall?\u00a0<\/strong><\/p>\n 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.\u00a0<\/span><\/p>\n 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 \u201c2018 me\u201d would have felt no choice but to take a guaranteed job for 20% less pay and be miserable every day. I\u2019m 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.<\/span><\/p>\n 18. Have you come out of the FIRE closet yet? Meaning, do your friends, family, co-workers etc. know about your financial independence goals?\u00a0 If so, how did you bring it up and what were their reactions?\u00a0 If not, why not?\u00a0 Why do you struggle with this conversation and why do you feel that money is such a taboo topic?\u00a0<\/strong>\u00a0<\/span><\/p>\n 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\u2019m a small step ahead with investing. That friend sure does know about my planned retirement date.\u00a0<\/span><\/p>\n 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.<\/span><\/p>\n My mum is absolutely aware and I try to convince my sister to consider it, but no luck yet.<\/span><\/p>\n My retirement date is currently tied to my child\u2019s schooling. It is a nice clean point in time to be aiming for that will allow me to pause, leave, and live my life.<\/span><\/p>\n 19. What pieces of advice would you suggest to someone who is just starting out or someone who is working toward reaching financial independence?\u00a0<\/strong><\/p>\n Find the people in the personal finance space that resonate with you and see what you can replicate. You don\u2019t need to reinvent the wheel, people have done it before you, learn from them and make your journey uniquely yours.\u00a0<\/span><\/p>\n 20. What does the word \u2018success\u2019 mean to you?<\/strong><\/p>\n 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.<\/span><\/p>\n 21. Are there any books, blogs, or podcasts that you would recommend for our readers to check out?<\/strong><\/p>\n Books: Your Money or Your Life, The Simple Path to Wealth, and The Barefoot Investor<\/span><\/p>\n Podcast: Explore FI Canada<\/span><\/p>\n 22. How can people get in contact with you?\u00a0<\/strong><\/p>\n I\u2019m most active on Instagram @singlemoneyjourney<\/a><\/span><\/p>\n Great responses, SMJ! Here were my key takeaways from this interview:<\/span><\/p>\n 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\u2019re staying in Canada (again!) with one of my favourite commenters on our blog who will share his journey to retirement.\u00a0<\/span><\/p>\n 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.<\/span><\/p>\n We love highlighting other members of the FI community. Please\u00a0<\/span>contact us<\/span><\/a>\u00a0if you\u2019d like to be a part of the FIRE Community Guest Interview series and we\u2019ll see if we\u2019re a good fit!<\/span><\/p>\n And in case you wanted to read the previous interviews that make up our FIRE Community Guest Interview Series, here you go!<\/span><\/p>\n
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