A $100,000 salary is still a lot of money, but there are many parts of the country where it doesn’t stretch far when basic living costs are taken into account
For Sonia Grossi, pictured in Toronto's Yorkville district, living alone in a one-bedroom apartment without a roommate is her one indulgence, albeit for $2,600 a month. For many Canadians like Grossi, earning a $100,000 annual salary was once a sign that they had 'made it.' It's a much different story these days, depending on where they call home.Sonia Grossi used to think $100,000 a year was a lot of money.
With good financial discipline, $100,000 earners with contained shelter costs describe regular savings, annual vacations and impeccably paid-off credit card balances, even aftertwo years of elevated inflation and a spike in interest rates. But for those who have to make oversized rent or mortgage payments, inflation is tightening already tight budgets. Getting by means fussing over the costs of things like medicines for sick pets.
Mr. Hudson said he couldn’t remember the last time he had a carryover credit card balance. And yet he’s still able to afford annual vacations. He usually travels to Victoria, B.C. to see a close friend once a year, and likes to break up winter doldrums with a trip to somewhere like Los Angeles or Mexico.
The 44-year-old registered massage therapist, who also teaches at Centennial College, has no anxiety about paying her bills or saving for retirement and big-ticket expenses. She’s planning a trip to India and Nepal in December.Stacey Neilson, of Bowmanville, Ont., owns a one-bedroom condo she bought for $300,000 in 2019. She also had the foresight to renegotiate her mortgage and lock into a lower rate.
In Vancouver, 38-year-old Matthew Poirier and his partner aren’t living large. For $2,000 a month, the couple shares a 500-square-foot one-bedroom apartment that also serves as an office for Mr. Poirier, whose job as a business analyst is fully remote. “Six figures can still go pretty far if your housing is manageable,” she said, speaking of the situation in the Toronto area. “The people who are signing leases in the last five years, especially the last three, or people who have bought houses in the last three years – this is where I feel like the pinch on $100,000 is being felt.”
Today, Mr. Cameron has switched industries and is back in a steady job with a salary of just over $100,000 a year. He calls himself “fairly fortunate,” because he spends just under $2,300 a month to rent the spacious first floor of a house. But after he finishes paying for essentials there is not always enough left over for him to put money back into his retirement accounts, he said.
Lofty vehicle prices and high interest rates mean Canadians are now paying an average of $813 a month to finance a vehicle on a seven-year loan, the most popular auto loan term, according to data from J.D. Power & Associates, a data analytics and consumer intelligence firm. That’s up nearly $200 from the same period in 2019.
Of course, most urbanites can easily do without a car. But for people who rely on cars to commute into city centres, the swelling costs of ownership are eating into the savings that normally come from living far away from a downtown core. The timing looks particularly awful for young Canadians who are trying to strike out on their own. But the issue goes well beyond the generational stereotypes, which usually pit younger people against more financially secure Boomers.
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