Live two to spare

Vivre à deux pour épargner

Life in solitary is gaining ground in the canadian population. But once adopted, this mode of life, can have several negative impacts on the portfolio.

This is the conclusion of a Statistics Canada report published on march 9, which examines the characteristics of people living alone in Canada.

This report presents several statistics from the last census, dating from 2016. According to the last census, the proportion of people aged 15 years and over living alone in Canada has increased from 9 % in 1981 to 14 % in 2016. In Quebec, it is 18 % of the population 15 years and over who lived alone in 2016, which represents the highest proportion in all provinces and territories.

To live alone means to pay for the entire cost of all housing. In Canada, 41 % of people living alone are located in a housing considered unaffordable, that is to say that it represents at least 30 % of the monthly income of the household. In 2017 in Quebec, all categories included, the costs associated with the accommodation occupied 26.9% of the household budget.

Less expensive, but also more profitable

The data presented in the following table are based on the averages recorded by Statistics Canada and the Institut de la statistique du Québec.

When comparing the data of the four slots, it becomes obvious that the life in two is more economical than life in solitary.

But the calculation goes further, since the money saved can be used for something.

And this something is defined in terms of three options : either spend the money saved, either do nothing, otherwise make it grow. This third option could be very cost-effective over the long term. Considering the principle of compound interest (meaning that the interest accumulates on the interest), you could accumulate a tidy sum of money for retirement or for a project that’s close to your heart.

In addition, if you choose the option of being a home owner, you will accumulate capital gradually paying down your mortgage.

This capital could be reinvested in an investment project of a larger scale, for example in the acquisition of an income property.

Tips

  • Whether you choose to live alone or in pairs, make sure that your housing is eroding not all of your budget. Make a good saving.
  • If you choose the option of acquiring a co-ownership, it will be good to verify that the provident fund of the complex is sufficiently stocked. Without this, in the event of an unforeseen emergency or major breakdown, you might find yourself in the obligation, with the other co-owners to pay for an expense is potentially high.
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