Among the things we learned in the pandemic was how much it costs in time and money to commute to work.
Money saved through remote work has contributed to the billions of dollars parked in savings accounts right now, while time saved has improved family life and lowered stress levels associated with traffic and transit that doesn’t run on time.
The return to work is the topic of Episode One of the fifth season of our Stress Test personal finance podcast for Gen Z and millennials. We started the podcast just as the pandemic began – that’s where the term Stress Test comes from.
The pandemic has ebbed and flowed since then, but the stress remains. Most recently, it’s found in households where one or more people must transition from the comfort and convenience of remote work to office life
There can’t be a household in Canada that hasn’t already felt staggered by inflation’s effect on at least one aspect of daily life. The return to work doubles down on this inflation exposure by increasing the amount of driving, the number of takeout meals, the amount of clothing purchased and dry cleaned. If you last commuted by car in early 2020, you’ll find today’s gasoline prices about 38 per cent higher on a national average basis.
In our podcast episode on the return to work, we cover all the costs commuters must reacquaint themselves with, and we hear about how young adults are adapting to the return to work. Some are taking advantage of the worker shortage in some areas of the economy to negotiate flexibility in their work-life balance that would have been unimaginable in pre-COVID days.
Worker empowerment is one of the most surprising economic effects of the pandemic. Take advantage of it to ease the cost of the return to work.
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Rob’s personal finance reading list
All-inclusive vacations and your travel reward card
A look at the best travel reward cards for people who want to use points toward all-inclusive vacations as opposed to flights or hotels.
Now is the time to ask for a raise
Tips on when to ask for a pay boost, how much to ask for and Plan B strategies like extra vacation time.
Q&A
Q: I want to simplify my financial life and I’m seriously looking at buying an asset allocation ETF like the BMO Balanced ETF (ZBAL) or the Vanguard Growth ETF Portfolio (VGRO). If I buy ZBAL or VGRO in my nonregistered account, they contain a Canadian component. My question: How will that purchase affect the dividend tax credit for Canadian stocks?
A: Let’s use ZBAL as an example. This ETF offers a balanced portfolio with 60 per cent of its assets in stocks and 40 per cent in bonds. Canadian stocks account for about 17 per cent of the total portfolio. On the BMO ETFs website, the fund profile for ZBAL shows that a total of $1.15 per unit was distributed to shareholders last year, 13.7 cents of which was considered eligible dividends and thus eligible for the dividend tax credit.
Do you have a question for me? Send it my way. Sorry I can't answer every one personally. Questions and answers are edited for length and clarity.
Today’s financial tool
For tax planning – the 2022 personal tax calculator from Ernst & Young
The Money-Free Zone
Best accordion ever – Man Enough, by Lloyd Cole.
Tweet of the week
Lower house prices, anyone? Rising rates are having an effect.
In case you missed these Globe and Mail personal finance-related stories
- Decision to retire early easy for 57-year-old entrepreneur, but follow-through proved difficult
- Mortgage Rundown: ‘Inflation horror show’ could mean three years of misery for variable-rate borrowers
- Court decision provides a breath of fresh air for taxpayers
More Rob Carrick and money coverage
Subscribe to Stress Test on Apple podcasts or Spotify. For more money stories, follow me on Instagram and Twitter, and join the discussion on my Facebook page. Millennial readers, join our Gen Y Money Facebook group.
Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Are your parents giving you money? • Why it’s time to stop shaming the renting lifestyle • Is now the right time to buy a house? • Why are young Canadians leaving the cities they love? • Eating in: How COVID has shifted our food spending • Crisis-proof your finances? • Can you afford to live downtown? • The cost of kids
- ✔️ The housing file: The housing boom is ripping apart the financial fabric of Canada • Shut out: A well-qualified millennial home seeker throws up his hands after losing multiple bidding wars • Big city housing affordability is over – now what? • She sold her Toronto house to retire somewhere cheaper, but it didn’t work • How young adults and the whole country win with a tougher mortgage stress test for home buyers • Can’t afford your house? It’s likely not your fault
- 📈 Investing: Robo-advisers have grown out of the novelty stage. Here’s help in finding one right for you • The 2021 ETF Buyer’s Guide: Best Canadian equity funds • The 2021 Globe and Mail online brokerage ranking: Who’s best for investing … and answering the phone • Are these the stock market returns of a lifetime? • On the cusp of retirement and wondering about an ETF that pushes the limits on aggressiveness
- 💰 Your money: The five most important numbers for checking the health of your personal finances • Today’s freakishly low mortgage rates can’t last. What will pandemic home buyers do when they rise? • There’s a cost in money, isolation and family stress when seniors choose to remain in their own private homes • Taking CPP early can cost you $100,000 and limit your long term options • Fleeing the city for the suburbs? Watch out for higher property taxes, more cars and other costs
Are you reading this newsletter on the web or did someone forward the e-mail version to you? If so, you can sign up for Carrick on Money here.
Rob Carrick