Living in the Toronto and GTA area can be difficult to balance your budget. It costs the average person about $4,000 a month to live in the city, according to Careerbeacon’s salary report.
Here’s what experts say you should keep in mind to make your life a little easier.
Share your living space
University of Toronto professor and expert on financial management Laurence Booth suggests sharing an apartment or renting a bedroom to cut down on rental cost. Even moving to smaller cities like Peterborough, Hamilton, or London could help since housing prices are cheaper.
“It’s difficult because Toronto is emerging as a very expensive, rapidly growing world class city,” Booth said.
Canada is accepting 500,000 immigrants a year and Booth said that since the bulk of newcomers are settling in the GTA, there is a push for accommodation.
“Toronto is fast-tracking its housing market. But thankfully we’re not as expensive as the other world-class cities,” he said.
However, University of Toronto professor and housing affordability expert Karen Chapple has warned that could change.
“We are seeing that it's quite common to move within the region into smaller cities like London and Hamilton,” she said. “But those cities are now seeing their affordable crises.”
Chapple said that although the housing affordability crisis is affecting young people more than other demographics, there is a solution.
“The easiest way out is what we call ‘renovating revolution’ where you buy a house, share your mortgage with your friends and fix it up. Buy a single-family home and divide it into multiple units. The province made it legal and they should take advantage of it,” she said.
Young people in this category are even deciding to leave Ontario altogether.
Stats Canada shows that about 20,500 people aged 25-29 years left Ontario within the last two years.
Watch your credit card debt
According to the rates section published by Craig Pickthorne on Ontario Living Wages website three months ago, the 2022 living rate for residents residing in the Greater Toronto Area is “$23.15 an hour.”
“It is a painful experience for those on minimum wage and low-income people,” Booth said.
Booth added that it’s a good idea to think twice about paying for groceries on a credit card.
“Don’t under any circumstance use your credit cards to pay for groceries,” he said. “Interest rates on credit cards are ridiculously high.”
“You can’t borrow to pay for basic goods and services. You have to adjust what you can to your wallet,” Booth said.
This is especially important for people living on minimum wage as Booth thinks it’s because they spend “proportionately more” on accommodation and food than others.
Make more money
The Ontario government is making plans to increase the minimum wage to $16.55 an hour on October 1, 2023.
“The 6.8 per cent pay raise for low-income workers builds on the government’s steady and predictable increases every year to help families offset the rising cost of living,” according to the official government of Ontario press release.
Craig Pickthorne of the Ontario Living Wage Network said that because of the high cost of living for people in the GTA, increasing the minimum wage would not make a difference.
“If you're not making at least $23.15, you’re just not able to pay your bills. With the increase in inflation and affordability, you are only seeing a pay cut,” he said.
However, Pickthorne did insist that it could make a difference to people who work in airports, rail, and interprovincial travel, as they are federally regulated industries.
“Federal banking employees, security guards, cleaners, and contract workers will also see a modest increase in their wages,” he said.
Expect some relief
According to Booth, he expects the interest rate and minimum wage will go down soon.
“It will pass within the next 18 months. By the summer of 2024, I would expect the rate of inflation, food cost to come down, and a decline in short-term interest rates,” he said.
This was originally published in the April 2023 edition of Scribe magazine.
