Stagnant wages have become commonplace in today’s economic climate. Since 2008, many workers who are not represented by a union or negotiating body have had their salaries frozen or even rolled back. The lucky few have seen modest annual cost of living increases at best.
One of the biggest obstacles in my journey toward financial freedom is that my salary has increased just 16 percent over the last six-and-a-half years. That’s an average of 2.5 percent a year; barely enough to keep pace with inflation and certainly not enough to keep up with the needs of a growing family.
The environment won’t get better any time soon. The province – even with a public sector friendly government in place – faces a stiff economic challenge and massive deficits ahead. They’ve recommended a two-year wage freeze for all non-bargaining staff, putting a halt on further increases until July 1, 2018.
Despite all of this, I still have my eye on financial independence and I’m still on track to reach this milestone by the time I turn 45.
I’ve recently changed roles within my organization, the results of which should lead to a reclassification of my position and a chance to earn a promotion. Change is slow, however, as I was reminded by this quote from an article in The New Yorker:
“I don’t work in a start-up. I work in a brick-and-mortar university, one of the most institutionally conservative workplaces in the world outside of North Korea.”
In the meantime I’ve ramped-up efforts on my side business – blogging more frequently, adding another freelance writing contract, and working to build more advertising partnerships. The extra hustle has paid off so far this year with revenue increasing by 25 percent.
My wife even got in on the act, using websites like Kijiji and Facebook’s local Swap & Buy groups to sell a tonne of our old baby stuff. She not only got rid of a bunch of items we’ll never use again, but she earned $700 in the process!
On the expense side we monitor our daily spending and save money where we can. Smart-phone apps like Flipp and Checkout 51 help us save a few bucks on our groceries. A regular review of our subscriptions and recurring bills keeps our monthly payments in check.
The big-ticket items are where we can really save money. Our 2013 Sante Fe will be paid off in September. That frees up $800+ per month which can be directed towards our savings goals and inch us closer to financial independence. Rather than buying a new vehicle right away we’ll keep our two payment-free cars on the road for the next several years, allowing us to build up our savings even faster.
Our mortgage comes up for renewal in the fall and I expect to get another great deal under 2.5 percent. It has been five years and we still love our house enough to call it our forever home. Staying in this home and resisting the urge to move and upgrade will save us tens of thousands of dollars in moving expenses and realtor fees.
When I project what our finances will look like in the next five-to-10 years I make sure to be ultra-conservative with the numbers, keeping my salary and expenses in-line with inflation. If I get a promotion, or regular salary increases return to the 4-6 percent a year range, I’ll simply treat that as a bonus to help reach our goals faster.
Stagnant wages aren’t going to derail our plans for financial freedom. By finding creative ways to earn more money and keeping our expenses from getting out of hand, we can continue marching along towards financial independence.