Weekend Reading: Manufacturing A Raise Edition

My employer – acting on direction from the provincial government – is freezing wages for the 2016/17 fiscal year. No salary increase, plus inflation, means that our growing family will actually be earning less money over the next 12 months.

It’s a frustrating situation but I’m determined to make the most of it by manufacturing my own raise so that we can still meet our financial goals next year. Here’s what I mean:

  • Canada Child Benefit – The new monthly CCB payments came into effect this month and our family received an extra $115 over and above the old UCCB and CCTB payments. That’s $1,380 to save and direct it towards our financial goals.
  • Selling used items – We had success selling kids stuff and unused electronics on Kijiji and Facebook swap & buy last year. We have a few more items to sell over the next year that we hope will net us $500.
  • Paying off car loan – In three months we’ll be rid of our $825/month car payment. I had already planned on using that money to put towards our TFSAs, however we can steer some of it towards cost of living increases if necessary.
  • Increase withdrawals from our small business – We set up our online business as a corporation several years ago. We take out about $3,000 per month – paid to my wife in dividends as an income-splitting strategy. It’s more advantageous from a tax perspective to leave any extra income in the business, however we can afford to pay out an extra $500 per month if needed.

I believe that increasing income is a better path to wealth than cutting expenses to the bone. That said, we’ll keep a close watch on our daily living costs to minimize the impact of inflation. That could mean anything from cutting back on travel next year, to trimming our cable package, and eating less red meat.

Who knows, by adopting these strategies we might end up further ahead even without getting a raise.

Is anyone else feeling the pressure of stagnant wages in this economy?

This Week’s Recap:

On Monday I compared three online lenders; Borrowell, Grow, and Mogo.

On Wednesday Marie offered some lessons on teaching young kids about money.

And on Friday I shared some pitfalls to avoid when financing a vehicle.

Over on the Lowest Rates blog I explained how to get a better rate when renewing your mortgage.

Jessica Moorhouse included us in the 20 personal finance blogs and podcasts you need to check out this year. Thanks Jessica!

Weekend Reading:

Directly related to my wage freeze, a report by TD economics suggests this Alberta recession is one of the most severe ever.

Another interesting read on how Sobeys screwed up Safeway in a messy takeover that left empty shelves, massive losses, and drove customers away.

Speaking of spoiled groceries, here’s a spoiler alert: You’re wasting 1 in 4 bags of groceries.

Robert Shiller explains why land and homes actually tend to be disappointing investments.

Some good advice on what not to do when you’re twenty-something and hate your job.

More research shows that paying with cash hurts – and that’s a good thing:

When people pay for items using cold, hard cash rather than by card or online, they feel more of a sting and therefore assign more value to the purchase, according to Avni M. Shah, an assistant marketing professor at the University of Toronto Scarborough.

Congratulations and good luck to Gail Vaz-Oxlade, who has officially retired at 57.

David Trahair’s new book, The Procrastinator’s Guide to Retirement, says even low savers can retire in 10 years.

If you want to retire wealthy you’ll need to pay attention to fees. Next to buying a home, investment fees can be the average Canadian household’s largest single expense.

John Heinzl continues to debunk RRSP myths.

Big Cajun Man Alan Whitton presents a simple primer on Couch Potato investing.

Should you trust your accountant or financial advisor? Jason Heath explains what to consider when faced with conflicting advice.

Kerry Taylor took a closer look at online lender Mogo and asked whether this instant online debt solution will make your borrowing problems worse?

Feeling gouged by airline fees? Here are some tips to avoid those pesky charges.

The Public Interest Advocacy Centre (PIAC) looked into the Air Miles expiration controversy and offered some suggestions for Air Miles to respond to its members.

Having trouble redeeming your Air Miles Dream rewards? Stephen Weyman shares five options to get the most bang for your rewards buck.

Finally, Krispy Kreme is launching a Canadian comeback with plans on opening 50 stores in Ontario and Quebec in the next five years. I’m not convinced Canadians will bite.

Have a great weekend, everyone!

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  1. Big Cajun Man (AW) on July 24, 2016 at 10:03 am

    Thanks for the inclusion this week, there are a bunch of excellent sample couch potato portfolios out there (including on this very site). Some interesting comments on the site as well.

    • Michael O'Byrne on July 24, 2016 at 10:25 am

      Congrats on taking a positive and proactive approach to the income freeze. Without any doubt, it will work out better than sitting on your posterior and moaning about it.

      I realise that is an obvious comment but I am finding more and more people who are just letting life roll them over.

      Re your Krispie Kreme comment – major GROAN LOL

  2. Andrew Gr on July 24, 2016 at 12:36 pm

    Out of 25 years in the work force I’ve only ever had one employer provide wage increases yearly, which were never even close inflation. So the idea that anyone “expects” wage increases matching inflation is astounding.

    The only real way to go after a wage increase is to either petition a boss on your value and/or go after a job internally. More likely the case is go to a new employer.

    • Echo on July 27, 2016 at 9:46 am

      Hi Andrew, wage freezes have become fairly common recently but I’d argue that it’s not unreasonable to expect wages to increase with inflation (which has been less than 2% for years).

      I agree that the solution might be to angle for a promotion or find a new employer.

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