Since I have been at my job for several months now, I thought I would give you an update at to how I am surviving financially with my pay cut.
No, I am not eating KD every day.
But what an unhealthy, yet deliciously comforting idea that would be.
I should backtrack a bit and go over what got cut. So for almost 5 years, I was working a very stable and secure job with amazing benefits, lots of vacation and various types of leave. However it was not a cushy office job. The position was somewhat physically demanding and involved working in slightly harsh environmental conditions. I was making an above average salary + variable overtime each month. I was told since I got in early, I would wind up with a great pension when I retired 30-35 years later. Just like my parents who stayed with the same type of profession for 30-35 years. My dad stayed with the SAME COMPANY for 35 years. I know that was the norm back in the day, but it really still boggles my mind how he was able to stay at his job for so long. And to think, up until just a few months ago, I was chugging along that very same path.
Although my efforts at work were being recognized,there were a lot of roadblocks placed in front of me that were beyond my control and anyone else’s for that matter. I decided it was best to go the road less traveled. In order to do so, I had to take a pay cut. I’m not going to lie, every now and then, I think about how much money I used to be making (And it really wasn’t even that much compared to what all my friends and family are making). And then I think about how much happier and satisfied I am with my life now. My husband who was my rock and supported me through it all has also noticed. As the saying goes, “Happy wife, happy life.”
So how has the pay cut affected my finances overall?
I don’t have a pension anymore and my current work doesn’t provide an employer RRSP matching program
I’ve decreased my contributions to only a few hundred dollars a month combined for my TFSA and RRSP, but still contributing on a regular basis
I contribute a few hundred less than what I do our joint account.
I still have my side hustle as a group fitness instructor
It’s definitely not worth bragging about, but I am able to monetize my blog
Despite being taxed quite a bit on the payout (vacation + pension), I wound up with a nice chunk of change. The whole process took FOREVER and gave me a massive headache (not to mention a bit of stress) in that I had to fill out a ridiculous amount of paperwork and make a TON of phone calls because I didn’t understand the cryptic paperwork. I wouldn’t say going through all that bs was worth it, but it had to be done in order to get my money.
The majority of it went to my regular RRSP and my locked in retirement account. So far, I’ve used some of that cash sitting in my RRSP to purchase a Canadian Equity Index ETF. I plan to purchase more ETFs and stocks and maybe try to learn how to rebalance my portfolio and all that jazz.
*Insert jazz hands here.*
What is also helping me survive is that I’m frugal by nature. I do most of that stuff people tell you to do if you want to save money (buy generic, rarely eat out, don’t buy crap, make your own coffee, etc). My mom says I get it from my grandpa, but I feel I picked up some habits from my dad as well. Not to leave her out, but it was actually my mom who introduced me to investing. I also follow that golden rule of tracking your expenses.
There are several ways my work saves me money, but I save even more money now (my transportation costs are reduced) and time because I work from home 3 days a week.
So combine all of the above and no debt except a relatively modest mortgage (well, at least I think so compared to most mortgages in the GTA), I think I’m doing A-OK.
I’m a survivor. WHAT.