Open this photo in gallery
Ms. Clarke contacted me by e-mail to ask a question that comes down to this: Will she mess up her life financially if she moves out now and rents a place to live? The answer is no.
From what I can tell of her abilities with money, she’d be just fine if it happened that she rented forever.
Her problem is simple: “I want to get on with the next phase of my life.”
Roughly two-thirds of Ms.
“They work contract jobs a lot, and every few months it’s always changing. They don’t know if they’re going to have a job or not.
On the weekend, she works at something called a float centre, where you can relax by floating in a salt-water tank. Altogether, she’s bringing home enough money to have a solid foundation in her tax-free savings account and registered retirement savings plan, and a strong likelihood of having her student debt paid off by year’s end.
Members of the cult of housing will applaud this young woman’s discipline and commitment. According to a budget she sent in her e-mail, spending on herself every month includes just a gym membership and Netflix.
She says she also goes for a dinner out and a movie maybe once a week.
Moving out would help Ms.
Clarke shift into the next phase of her life, but at the cost of near-term home ownership. So, what about adopting a longer-term plan to own a home? She could buy a house at 38, aim to have the mortgage paid in 20 years and still have time to top up her savings before retirement.
In fact, Ms. Clarke’s money skills give her a strong chance of being a financially successful renter.
Homeowners often scoff at the idea of renters being able to do this, but Ms.
Clarke is a recent convert to smart money management. “It started in September,” she recalls.
“My sister had a birthday and her friend got her this book called The Total Money Makeover by Dave Ramsey. My sister didn’t read it all.
I read it thoroughly, and I went, ‘Whoa.’ It was really amazing, actually.
It really turned my head around on a lot of things.”
One of those things is debt.