I bit the bullet today and increased my retirement contributions.
For those of you who aren’t Canadian, in Canada we have two deductions that are taken off our pay stubs in addition to standard income tax: CPP (Canada Pension Plan) and EI (Employment Insurance). Both of these have annual maximums, so if you’ve contributed the maximum in a given year, your employer stops making these deductions and your take home pay increases. This usually happens for me around September.
The higher net pay is awesome when it happens, but it kind of sucks when the new year rolls around and you have to start paying them again. After the pre-Christmas spending frenzy, I was more than a little concerned that I would have difficulties readjusting to my reduced pay in the new year. After a test run on the last pay period, I’m happy to report that it hasn’t been the case.
Last pay period really was a test since my pay was quite possibly the lowest it will be all year. Not only have the CPP and EI payments started up again, I also committed myself to making a $20 biweekly donation to the food bank, and I had a $50 payroll deduction for entry to a work based social event. Despite this, I still managed to pay my bills and put a reasonable chunk of money aside into my TFSA.
So, knowing it was manageable, I upped my biweekly contributions another $70 bringing my automatic pension deductions up to 10%.
I suppose that lower pay cheque earlier this month isn’t the lowest my net pay will be this year *facepalm*
One resolution down, 6 more to go.
Has anyone else started tackling their goals yet this year?
Recommended Reading : Rethinking the Emergency Fund