It’s a challenging time in Vancouver as many residents express their stresses due to the high cost of living. Despite a household income of $300,000, one man says he is “drowning.”
A podcast series about finances called The Ramsey Show shared a call it recently received from Vancouver resident Paymon.
As the Vancouver man spoke to co-hosts John Delony and George Kamel, he first pleaded with them for help.
“I really need help from you guys,” he said, adding his family is spending more than they can earn.
According to Paymon, he is taking home $8,500 a month. His wife earned $4,000 a month, but she is currently on maternity leave and does not plan to return to work for a few more months. He said that she is currently earning around $1,600 a month from employment insurance.
Paymon also broke down his monthly expenses on the podcast to give the co-hosts a better idea of what he is up against.
He explained that he bought a 20-year-old suburban home for $1.4 million two years ago. Initially, monthly payments for the house were $5,400, but it increased to $7,200.
The couple rents two bedrooms in their home and earns $2,000 from tenants.
Fixed monthly costs include $420 for property tax, $50 for leasing instruments, $150 for a gym membership, $2,000 for groceries, $350 for utility bills, $1,000 in car loans, $250 in city costs, and $530 for insurance for his house and two cars.
Monthly expenses total just under $12,000. With all their combined earnings (while his wife is on maternity leave), they bring home just over $12,000 a month.
“The glaring problem”
After hearing Paymon’s overview of expenses, Kamel suggested, “Number one, your mortgage is the glaring problem here.”
“You have to sell your house,” Delony insisted. “It’s too much.”
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Paymon suggested he can reduce the cost of his home payments in the future. However, Kamel said his housing costs are still half his income.
“It’s not going to solve the problem. Our perimeter for housing is 25% of take-home pay,” Kamel explained.
“And right now, you’re at 60%… You guys simply have too much house — for even with an amazing income that you have or had, it’s still a lot of mortgage for where you’re at.”
“Throwing away” cash
Secondly, Kamel said the other glaring issue was Paymon’s car loans.
Paymon said he purchased a vehicle because he is a road salesperson and saw the government was offering rebates. He bought a $75,000 vehicle last year and wrote off $63,000, he said.
“So my return on tax was $30,000,” he said but added he’s already spent $20,000 of that refund.
Downfall of ‘get rich quick’ mindset
In response, Kamel said, “No one built wealth through tax savings.”
“The problem is you’re throwing away $1,000 right now, plus interest on all this while you’re drowning,” Kamel added, referring to Paymon’s new vehicle.
Kamel called Paymon out, saying he is making assumptions that “life hacks” such as renting out rooms and receiving tax breaks will relieve him of financial challenges.
“I don’t think write-offs are the solutions to your problem,” Kamel said.
“You have to sell your million-dollar house and your $75,000 car you can’t afford, man,” Delony chimed in.
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In response, Paymon explained that renting a home in Vancouver is still financially demanding.
“A two-bedroom in the smallest apartment goes for $4,000 for 500 square feet,” Paymon said.
However, Delony advised, “Four thousand dollars is actually a reasonable amount for you to pay, and you might have to do that. And you’re not throwing away money on rent. That’s you building back a foundation.”
Vancouver living is “chaos”
Delony sympathized with Paymon, adding that living is “chaos expensive” in Vancouver.
“I cannot defend or explain what the heck is happening in Canada,” Kamel said.
“I know [in] Canada, the numbers… are astounding,” Kamel said to Delony.
“I know it’s madness,” Delony responded.
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However, many people online were less emphatic than Delony and Kamel about how Paymon was spending his month.
“At the end of the day, the problem is that people with six-figure incomes refuse to make sacrifices,” one person commented on YouTube. “They act like they’re above cutting back on costs. [It’s] 100% a people problem, not a money problem.”
“Imagine being so foolish that describing your financial situation involves using the words ‘struggling’ and ‘we make $300,000 a year’ in the same sentence 🤣🤣,” one person joked.
“Two thousand dollars in groceries and $150 on gym membership? Yeah… that tells me a lot about their lifestyle,” another person added.
But whether people sympathize with Paymon or not, most agree the cost of living in Vancouver is staggering.
“I used to live in Vancouver, BC and moved away because the realities of owning a home in the city is ludicrous,” one person wrote online.
According to their latest affordability report, the average home price in Vancouver was $1,195,500 as of August 2024. Additionally, the income required to purchase a home is $224,000.
How has the cost of living in and around Vancouver impacted you? Let us know in the comments below.