Flush But Still Frugal Woman Searches For The Budget Version of Everest

How A Debt-Free Canadian Who Got a Big Raise Does Money

“Jessica” is a 28-year-old Canadian with a shiny new gig and big plans. Note: all figures are in Canadian dollars.

Thanks for chatting! Let’s start at the top. How much are you making at this new job?

$95,000. Not exactly: it’s a bi-weekly amount that turns out to 95 and change.

And that’s how much more than you were making at your previous gig?

It’s $30,000 more than my total income last year. At my previous job, my salary was $70,000, but nearing the end of last year, I worked less than full time (at less than full time pay).

So, congrats! That’s a significant increase. How are you planning on adjusting your life and/or savings accordingly?

Thank you! They always say the best way to increase your salary is to switch jobs. Turns out, it’s been true for me!

My plan is to increase my savings quite significantly and to save up for an extra vacation. I also get twice the vacation time!

After taxes, my take home pay is about $1,100 more per month. I’d like to save an additional $1,000 per month. Also, because my pay is now bi-weekly, then twice a year I’ll get an extra pay that I’m not accounting for in my monthly budgets. I’d like the extra pays to just go right to savings, unnoticed elsewhere.

So, no lifestyle upgrade?

Well, that’s always the plannnnnn, no? But when I paid off my student loan a year and a half ago, I said I wasn’t going to make lifestyle changes and instead save the amount that I had been paying to my loan. But … that didn’t exactly happen. At all. I just spent the new available money. Hopefully I have learned from that experience!

What did you end up spending on that you didn’t expect to?

That’s from before I tracked my spending, but I would guess that it’s nearly all eating out. I used to cook at home 100% and fear being invited out places. I told myself I was just being social by spending more, but definitely some of the new eating out spending was due to convenience. Now I track/budget, so if I veer off the plan, I should notice it quickly.

Let’s back up a little and get some context. What region and what industry are you in?

I live in one of Canada’s biggest cities. I worked in a private consulting firm, and now I work for the government.

Wait, you’re making more in public service?

Yes! Sometimes I think I was underpaid at my old job, but mostly I think I’m way overpaid here. Everybody else who has my position is much older than me and has PhDs … I’ve got a bit of impostor syndrome!

Do you have a graduate degree, or did the student loan all come from your time at undergrad?

I have a graduate degree but it was funded. The loan is from undergrad.

How much was that for?


How long did it take you to pay off? What were your strategies for getting that done? And congrats, by the way, on making it to the other side!

Thank you! I posted about it during our monthly check ins but Mike never sent me a congratulations card!

I paid it off in a year and a half (my salary over that period of time was $49,000-$55,000) but it involved two tax seasons with major returns because I had saved up tuition credits. Not sure how that works in the US, but in Canada, I’m probably going to get it wrong, but I think I got 17% of tuition back basically? So I put every cent of tax returns against the loan.

Then I also had my bank account set up to automatically make monthly payments, but I made a spreadsheet that showed how much interest I would save if I paid an extra X this month. It was really satisfying to see how paying an extra $100 this month would mean saving $150 or whatever if my loan took the whole 10-year payment plan

Oh wow. Were there any particular splurges you allowed yourself during that period, or did you go into full-on ascetic mode?

In retrospect I was pretty full-on ascetic, but I didn’t really realize that until now, seeing how it feels to actually have money. I was raised in a household that was very tight on money, so nearly everything was a treat (real ice cream vs. “dairy dessert”). I don’t know how I could go back to that lifestyle now that I have some luxuries. But it didn’t feel all that horrible then.

Do you have plans to allow some more splurges in your life, now that you’ve paid off the loans and gotten the raise?

That’s tough … because I really like watching my savings grow, and I’d like to one day afford to take a full 12-month mat leave. (My partner earns much less than me, so I don’t think we could afford for me to be on EI for 12-months unless we’ve saved up quite a lot.) That’s a luxury, if not quite a splurge!

In Canada, you get 12 months of maternity leave on employment insurance rates, which is dependent on your salary but maxes out at $2,000/month, taxed. I know that’s way better than other countries, but it’s still not really enough for me to be able to afford a maternity leave unless I’ve saved up for it.

OK now I want to know everything about how Canadians do maternity leave, but that might have to wait for another day.

Plus I don’t even know everything yet! Plus I heard a rumour that this new cushy gov job tops up for the first three months? (I.e., I’d still be getting FULL pay??) It would be incredible and I’ve never heard of other Canadian whose employers do that. It could be an exaggeration. I’ll find out!

Please do and report back. How long do you think you have to save up before you and your partner want to do the whole baby thing?

Couple factors up in the air still, but the nearest plan would involve trying to get pregnant in the fall.

How does your frugality affect or work within your relationship? Is your partner careful with money too?

No, he has really different spending habits that me. We’re actually seeing a couples therapist about this starting in a few weeks! We’re working on it. We’re improving.

Does he come from a different background, money-wise?

Yes, his family immigrated to Canada when he was young, and his parents were keen on taking advantage of all the experiences Canada has to offer. Once his parents adjusted to Canadian life and starting making (quite a lot of) money, they really liked to treat their kids. His attitude is: what is money for, if not to enjoy life now? My answer: to also enjoy life later!

Is he in debt?

No, and he actually saves a lot of his income, percentage-wise. Honestly, we have plenty and are comfortable. It’s always arguments about “principles!” rather than urgent needs. We’re both just fine and neither of us should be stressed. That’s honestly a big realization. Cancel therapy! Ester fixed me!

Well that was easy! And satisfying. You do seem like you’re pretty well situated, which is great. Let’s do some rapid fire questions. What was your best financial decision?

Paying off student debt ASAP.

And the worst?

According to my dad, it’s not buying real estate even though I can afford it. Time will tell if he’s right.

Any regrets related to money? Anything you didn’t spend on that afterwards you really wished you had, or vice versa?

Yeah, I often try to be really, really frugal while on vacation. It’s like, “I already spend $1500 on the flights, better not spend an extra $30 on museum entrance fees” which is just so dumb. I’m saving up for a summer vacation where I want to put in enough buffer than I can just really explore and have fun without worrying about going over budget on something that I really want to do! So I regret that, but I don’t really have major spending regrets.

Actually I once bought a $120 dress because my friends said it looked good on me, and I’ve never worn it, and it’s a bad memory still years later. WHYYYYY. That’s all.

Where does your dream summer vacation take you?

India and Nepal, I think! I change my mind a lot.

I know a couple of people who invested the amount necessary to climb Everest — at least to base camp, the bit of the mountain that’s accessible to hikers rather than hardcore climbers — and even though it was really expensive they came back raving about it.

I’ll probably consider alternatives … I went to Peru last year and hiked Salkantay to Machu Picchu instead of the much more famous Inca Trail. It was about half the price but I think just as great! I wonder what poor-man’s base camps are out there?

That’s what I was just asking myself: what’s budget Everest? Well, you have a while to figure that out. Any last thoughts?

I set up an auto-transfer to my TFSA to force myself to save! Let’s see whether I cancel it some months … I hope I stay strong!

Me too! Feel free to check back in and let us know whether you’ve been successful and whether continuing to save has been either easier or more challenging than you expected, given your new more fortuitous circumstances.

Will do! Thanks Ester!

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