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Nancy, a dentist, has already been working four days a week for 10 years because she wanted to have three-day weekends. But initially, she worked 12 hours a day to maintain her high salary. “I came to work at 7:30 in the morning and left at 8 at night, so when I got home, I ate and went to bed,” she said. When can I look after myself? During the week, I don’t have time to train and on weekends, I multiply activities with my friends. »
A few years ago, she got tired of it and started working eight hours. Then the pandemic hit and she had to stop working for three months. “Having so much time to do something other than work is shocking! »
Shortly after that she recovered for two months. She loved taking time for herself.
So much so that she is taking five weeks of vacation this summer instead of three. Did she calculate if she could reduce her working hours that much? no
“I believe in life,” she said. I have a good salary and I have also negotiated a good percentage with the owner of the clinic. I’m still divorced, it’s very expensive for me, but I’ll adjust. I splurge less when necessary, for example on restaurants and clothing. »
Determine your priorities
The first question you should ask yourself before deciding to reduce the number of working hours is: “What is really important to me? says André Lacasse, financial planner and financial security advisor at Services Financiers Lacasse.
“If more time is needed, to travel, to discover other cultures, it will be easier to cut other expenses, for example expensive restaurants and wines, clothes or a car”, he said.
Create your budget and financial statement
It is important to look at different areas of its spending to see if they are consistent with its priorities. Do you know how much you spend per year on subscriptions to streaming services like Netflix and Disney+? How much are your meals ordered on delivery platforms costing you each month? Have you calculated your annual car expenses with a combination of car sharing, public transit and active transport?
Often people don’t know where their money is going. You need to see how much your habits are costing you and if they really come close to meeting important needs for you.
Andre Lacasse, Financial Planner
“When you keep statistics for each cost center, it’s more impressive and you can more easily eliminate unnecessary ones. »
It is also important to prepare your financial statement to assess your assets and liabilities. “Not all loans are created equal,” says the financial planner. For example, there is usually no rush to pay off a mortgage with a low interest rate, which is ultimately an investment. On the other hand, rushing to pay off a credit card balance at 19.9% interest would really benefit us. »
The The Office of Consumer Protection’s calculator shows that it would take 19 years and 3 months to pay off a $10,000 balance on a credit card at 19.9% interest by making the minimum payment each month without adding any purchases. Total credit charges $8851.81.
To create your budget and your financial statement, you can Download the Excel files from the Autorité des marchés financiers (AMF) website.
Assess your retirement savings needs
According to Andre Lacasse, you should carefully consider the amount of savings included in your budget and the assets invested in the various accounts on your balance sheet.
“Most people find themselves at one of two extremes: those who don’t save enough and those who save too much compared to what they need,” he explains. How much do you need to save per month to meet your goals? To find out, ask your financial planner for a retirement projection. »
We adjust our savings budget accordingly.
Estimate your new income
Then comes the time to see his income. We can try to negotiate a raise like Nancy did. Or accept an offer from a more generous employer.
But when you look at the number of dollars per hour you’re making, it’s still worrisome to consider cutting that many per year.
However, once tax is paid, especially when one’s tax rate is high, the actual difference is not that great.
A financial planner advises to use itDisposable Income Calculator from the Ministère des Finances du Québec. For example, for a person living alone earning $110,000, their disposable income in 2022 would be $72,462. If she drops her income by $100,000, her disposable income drops by $4969 to $67,493.
“Not everyone can afford to work less, especially those with lower salaries, but many can,” says André Lacasse. And it’s not just the size of the salary that makes the difference, but the ability to control expenses. »
Here are four possible solutions to explore with your employer
In the midst of a labor shortage, employers have every interest in being flexible if they want to keep their staff. And it can go through different solutions to have a better quality of life while reducing the economic impact. Carolyn Maranda, Certified Human Resource Advisor (CRHA), offers four possible solutions to consider.
1. Flexible schedule
“I enter several principles in this category,” says Carolyn Maranda. There are companies that allow employees to work their hours when it suits them, while others require them to work for certain hours of the day, but they can start and end according to their preferences. Others choose a compressed schedule: for example, doing all their hours in four days. The solution depends a lot on the type of company and its culture, but one thing is certain, companies tend to be more flexible in working hours. »
2. Bank of hours
“Building a bank of hours is a win-win solution for both the employee and the employer,” says the CRHA. Businesses often have busy times and staff may be happy to work a little extra and bank hours. Thus, these individuals may decide to take vacation or work part-time during certain weeks and take their accrued hours to be paid as if they were working full-time. »
3. Fewer hours, same pay
“The 40-hour week, which has been the norm for decades, is starting to get a little old,” says Carolyn Maranda. “The trend is to reduce it to 37.5 hours, even 35. Employees, especially the younger generation, want to work less. They have other important things in their lives like sports, personal projects, etc. There are things.
“Employers are also under a lot of pressure to offer a competitive total compensation package, even if everything costs more. Continuing to pay the same wages, but reducing the number of hours in the work week, may be a win-win solution. »
4. Flexibility in leave
“For example, employers can also offer a choice between a 2% salary increase and an extra week of annual leave,” says the CRHA. Or more days off between bonus and purchase. These solutions are easy for employers to manage and can make a big difference for people who want to do a little less work.
“There may also be an option of deferred leave: the employer pays 80% of the employee’s salary for four years and in the fifth year, he is on vacation, but 80% of his salary is also paid. . However, in the face of staff shortages, it may be difficult for the employer to replace this person for only one year.
“Employers can also agree that certain hours of work will be done from overseas. For example, someone who goes on vacation for three weeks and works remotely for the first of the three. »