Exactly a year ago, I wrote a column urging people to try improving their financial situation by finding a better-paying job or negotiating a raise. The smoking hot job market that led me to write that column is starting to fade.
After more than a year of high inflation, you’ve likely heard every frugal shopping tip known to humankind at least three times. You’ve heard the pros and cons of budgeting, been introduced to shopping apps and heard all manner of tips about budget travel and bulk buying. Increasing your pay is another option for improving your finances, but maybe not for much longer.
A recent update from BMO Capital Markets said the number of job vacancies has fallen to a seasonally adjusted 790,000 from more than one million last spring, while the job vacancy rate has fallen to 4.4 per cent from 5.7 per cent. We’re still above the prepandemic job vacancy rate around 3 per cent. But high interest rates are starting to weigh on the economy, just as the Bank of Canada intends. This suggests employers will be more cautious about hiring and about increasing pay for current workers.
Jumping to a new employer now could leave you vulnerable if there are layoffs down the road. Last into the workplace can mean first to go if there are job cuts. Offsetting this risk is an opportunity to build your career with better pay – and better benefits. A good dental plan and medical benefits could save a family thousands of dollars a year.
Our aging population suggests that filling all the vacant jobs in the economy could be a continuing challenge in the years ahead. But today’s elevated job vacancy rate argues for trying to increase your pay right now. In a year, expect this window to be closed.
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Rob’s personal finance reading list
Drive carefully
A couple took a Tesla for a test drive and were involved in a collision. To their surprise, the dealer billed them for $6,845 in damages. Think your car dealer has insurance to cover incidents like this? Maybe not.
Terrified about the cost of a wedding
A Reddit threat that perfectly captures the financial pressures of a big wedding. Should this couple cancel their plans to avoid going into debt?
A frozen pizza smackdown
Frozen pizza is pretty bad overall, but it’s a frequent grocery purchase for busy people who need a quick heat-and-serve meal option. Here’s a taste test of five frozen pizza types. My suggestion is order in some real pizza and freeze the extra.
The $2,450-a-month tiny home
A slice of life in Toronto’s once again hot real estate market – a 0.5-bedroom tiny home that neighbours fought to keep from being built is now on the rental market. Cost: $2,450 per month, not far off the average cost of a one-bedroom rental.
Ask Rob
Q: My question is about claiming my contribution to a First Home Savings Account on my personal taxes next spring. Will the tax savings from my contribution into my FHSA be the same amount as the tax savings from an equal contribution into my registered retirement savings plan? Does $1 contributed into my FHSA have the same tax savings as $1 contributed into my RRSP?
A: Yes. Here’s some background from RBC: “ … like an RRSP, contributions to an FHSA are tax-deductible. So, if you contribute $8,000 you can deduct the same amount from your taxable income.
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
A primer on how to find an investment adviser or financial planner.
The money-free zone
A graphic that brilliantly shows why you should be kind to people. I am serious.
Listen to this
I was interviewed on the The Decibel, a Globe and Mail podcast, about multi-generational housing.
ICYMI
What I’ve been writing about
- A BlackRock senior strategist on income investing, AI and how to up your game for the tough market challenges ahead
- The latest reading on inflation highlights what a great deal GICs and savings accounts are today
- Should we stop obsessing over adult kids living with parents and just call it multi-generational living?
More Rob Carrick and money coverage
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Even more coverage from Rob Carrick:
- 🎧 Catch up on Stress Test: Why millennials and Gen Z are Alberta-bound for a more affordable life • Rising interest rates brought pain for new homeowners – and opportunity for house hunters • Why more Canadians are choosing to be child-free or delay parenthood • Love in the time of inflation: How to manage rising costs when dating • You're not bad at money – you're suffering from money shame • Retirement might look different for Gen Z and millennials. Here's how to plan for it • Recession-beating tips for the job market, housing, investing and the cost of life • Is the middle class dead for millennials and Gen Z?
- ✔️ The housing file: A house isn’t special. Get your head straight about the reality of home ownership • The good, the sad and the unaffordable: Saving for a home down payment in Canada’s big cities • Property taxes are popping in some cities – how worried should you be about other tax hikes? • Our other real-estate problem – people have too much wealth tied up in houses • Borrowers and savers, here’s how to time the eventual rollback of interest rates
- 📈 Investing: Canada's top digital broker is TD Direct Investing, with an assist from the TD Easy Trade app • 2023 Globe and Mail ETF buyer's guide part one: Canadian equity ETFs • For the ultimate in cheap investing, check out the Freedom .08 ETF Portfolio • Yes, there is risk in Canadian bank deposits for the unwary and complacent • CDIC covers bank deposits, but who protects your investments if your broker goes bust? • Answers to your questions about the low-risk ETF paying almost 5% • Happy fifth birthday to one of the all-time best investing products for everyday people • An investing strategy that wins cleanly over the long term by outperforming in bad years like 2022
- 💰 Your money: Mortgage holders, savers and GIC investors, it’s time to change your thinking on interest rates • How much debt is each generation of Canadians carrying, and how do you compare? • For the sake of their financial futures, young people should leave Toronto and Vancouver • This practical new spin on a savings account might just peel you away from your big bank • Rental fraud grows amid rise in fake, falsified tenant applications • Are Canadians worse off financially now than in the 1980s? • From groceries to auto loans, here’s how much more it costs to live right now • When saving for retirement, should you change your asset mix over the course of your career? • Do retirement income needs always rise alongside inflation? Not necessarily • When the bank suggests you lock in your variable rate mortgage, it has an angle