A few friends and acquaintances have asked me how we’ve been able to afford the massive lifestyle change we’ve undertaken. Did we receive an inheritance? Were living expenses in Nova Scotia THAT much cheaper than Alberta?
Because I find talking about money fascinating (hence having written two personal finance books), I thought I’d share exactly how we’re making our new life work financially. It’s something that we wanted to do for seven years, and finally just took the plunge and did it.
First, I’ll state the obvious. While we haven’t ever received family money/inheritances/etc., there’s a measure of privilege at play in our lives. We were able to access higher education and have had good jobs that have opened doors to even better jobs. Those jobs have enabled us to save a decent amount of money over the years, to build equity in a home, and even to try my hand at entrepreneurship for four years because those salaries were never at sustenance levels (though it was for the four years I spent as a business owner).
Also, I’ve often seen friends, bloggers, coworkers make big financial life changes and been curious about what was happening behind the curtain. I thought people might find value in seeing our Oz.
We bought our Nova Scotia property seven years ago. In addition to the Alberta house we lived in, we paid the mortgage, house insurance and property tax on the Nova Scotia property. Each summer, we paid roughly $4,000 to travel across the country to spend way-too-short a vacation at what we called our Happy Place. We also spent a lot on entertainment and entertaining (groceries cost essentially the same amount here, but we entertain far less).
In Alberta, Keith and I both worked, and because the kids were young, a significant chunk of change went to daycare costs or babysitting. We spent a lot on extracurricular activities (recreationally, not competitive), because everything was close and easy.
You can see a comparison of our expenses below. As you can see, living in NS is dramatically less expensive for our family, based on lifestyle choices we made there versus here. Living rurally, it’s not so easy to hit up the mall and overspend on “stuff” or entertainment, or to get the kids to endless activities.
We’ve used the equity we had from the sale of our Alberta home to fund one time start up expenses, such as an outdoor wood boiler, a sawmill and household repairs.
|Expenses||Living in AB||Living in NS|
|Mortgage – AB||$2,200||0|
|House insurance – AB||$120||0|
|Property Taxes – AB||$258||0|
|Mortgage – NS||$550||$550|
|House insurance – NS||$300||$300|
|Property Taxes – NS||$225||$225|
|Kids sports/arts classes||$400||$50|
|LOC (car payment)||$328||$250|
|Canada Life Insurance||$95||$95|
|Telus home internet and TV||$100||$65|
|Sarah – misc||$100||$100|
|Keith – misc||$100||$100|
Looking at how much we spent in Alberta, I feel like we should have had more fun that we did! In some ways, $126k a year in after-tax income felt like so much money – and then in many other ways we always felt broke.
In the interest of full disclosure – I don’t make quite enough after taxes to pay for our monthly expenses these days. When Keith’s EI runs out, we will be short each month. We’re no Mr. Money Mustache family, and could trim even more if we were so inclined, but we aren’t.
When the EI runs out, we have plans to dip into our line of credit. Though we have enough in our savings to cover the shortfall for quite a few years if necessary, we’re choosing to use debt instead for a short while, as our investments have been doing extremely well and we’re willing to take some risk there.
We have one operational cabin that rented out far better than we expected this summer for having listed it so late in the season. Next summer, we’ll have a second cabin available for rent, and the Boler trailer, while Keith builds a third cabin. Our hopes is that within two years, the cabin income will cover the roughly $12,000 annual shortfall and start allowing us to pay back our debt and begin contributing to our savings again, above and beyond my pension.
Well, there you have it! TL:DR – our net worth is dropping for what we hope is a short period of time, but we consider this new lifestyle the best thing to ever happen to our kids and family, and haven’t regretted it for a single moment.