Posted at 5:00 a.m.
Nancy, a dentist, has been working four days a week for 10 years already because she wanted to have three-day weekends. But initially, she put on 12 hours of work a day to maintain her high salary. “I arrived at work at 7:30 a.m. and left at 8 p.m., so when I got home, I ate and went to bed,” she says. When could I take care of myself? During the week, I didn’t have time to train and on the weekends, I multiplied the activities with my friends. »
A few years ago, she got tired of it and started working eight-hour days. Then the pandemic hit and she was forced to stop working for three months. “It was a shock to have so much time to do other than work! »
Then, shortly after, she was in recovery for two months. She took a liking to having time for herself.
So much so that this summer, she is taking five weeks of vacation instead of three. Has she calculated if she could afford to cut her working hours that much? No.
“I trust life,” she says. I have a good salary and I also negotiated a better percentage with the owner of the clinic. I still went through a divorce that cost me dearly, but I will adjust. I will do less extravagance when needed, for example in restaurants and clothes. »
Determine your priorities
The first question to ask yourself before deciding to reduce the number of hours worked is: “What is really important to me? says André Lacasse, financial planner and financial security advisor at Services financiers Lacasse.
“If it is to have more time for oneself, to travel, to discover other cultures, it will be easier to reduce other expenses, for example expensive restaurants and wines, clothes or car”, he says.
Make your budget and financial statement
It is then important to look at its different areas of expenditure to see if they are consistent with its priorities. Do you know what you spend per year on subscriptions to streaming services, like Netflix and Disney+? How much do your meals ordered on delivery platforms cost you each month? Have you calculated your annual car costs versus what a mix of car sharing, public transit and active transportation would cost you?
PHOTO MARTIN CHAMBERLAND, ARCHIVES LA PRESSE
Andre Lacasse
Often people don’t really know where their money is going. You have to look at what your habits cost and if they really come to meet important needs for you.
André Lacasse, financial planner
“When you put figures for each center of expenditure, it’s more striking and you can more easily eliminate the superfluous. »
It is also important to draw up your financial statement to assess your assets and debts. “Not all debt is created equal,” says the financial planner. For example, there is normally no rush to pay off a mortgage with a low interest rate, which is ultimately an investment. On the other hand, we really benefit from hurrying to repay the balance of a credit card at 19.9% interest. »
The Office de la protection du consommateur calculator shows that paying off a $10,000 balance on a credit card at 19.9% interest by making the minimum payment each month without adding any purchases would take 19 years and 3 months . The total credit charges would be $8851.81.
To draw up your budget and your financial statement, you can download the Excel files from the website of the Autorité des marchés financiers (AMF).
Assess your retirement savings needs
You have to look carefully at the amount of savings included in your budget and those of the assets invested in different accounts in your balance sheet, according to André Lacasse.
“Many find themselves in one of two extremes: those who don’t save enough and those who save a lot compared to what they need,” he explains. How much do you need to save per month to reach your goals? To find out, ask your financial planner for a retirement projection. »
We will then adjust our savings budget item accordingly.
Evaluate your new income
Then comes the time to look at his income. We can try to negotiate a raise, as Nancy did. Or accept an offer from a more generous employer.
But it can still be worrying, when you look at the number of dollars per hour you earn, to consider reducing several per year.
However, once one has paid the tax, especially when one’s tax rate is high, the real difference is not that great.
Andre Lacasse
The financial planner recommends using the disposable income calculation tool from the Ministère des Finances du Québec. For example, for a person living alone who earns $110,000, their disposable income in 2022 would be $72,462. If she reduced her income to $100,000, her disposable income would drop to $67,493, a difference of $4969.
“Not everyone can afford to work less, especially for those with low 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. »
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 this can go through different solutions to allow them to have a better quality of life while minimizing the financial impact. Caroline Maranda, certified human resources advisor (CRHA), gives four possible solutions to consider.
1. Flexible schedule
“I enter several formulas in this category,” says Caroline Maranda. There are companies that allow employees to work their hours when it suits them, others that require them to be at work for a block of hours in the day, but they can start and finish according to their preferences. Others opt for a compressed schedule: doing all their hours in four days, for example. The solution depends a lot on the type of company and its culture, but one thing is certain, companies tend more and more towards more flexible working hours. »
PHOTO PROVIDED BY VIACONSEIL
Caroline Maranda, Certified Human Resources Consultant (CRHA), Partner and Practice Director of the human resources and global compensation consulting firm Viaconseil
2. Bank of hours
“Building up a bank of hours can be a winning solution for both the employee and the employer,” says the CRHA. Often there are busy times in the business and staff may be happy to work a little extra and bank hours. Thus, these people can decide to take leave, or work part-time during certain weeks and draw on their accumulated 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 several decades, is starting to be a little outdated, notes Caroline Maranda. The tendency is to reduce it to 37.5 hours, and even to 35. Employees, especially the younger generations, want to work less. They have other important things in their lives, such as sports, personal projects, etc.
“While everything costs more, employers also have a lot of pressure to offer a total compensation package that remains competitive. Continuing to offer the same wages, but reducing the number of hours in the work week, can be a win-win solution. »
4. Flexibility in leave
“Employers can also give the choice between, for example, a salary increase of 2% and an additional week of vacation per year,” says the CRHA. Or between a bonus and the purchase of more days off. These solutions are relatively simple for employers to manage and can make a big difference for people who want to work a little less.
“There can also be the option of deferred leave: the employer pays 80% of the employee’s salary for four years and the fifth year, he is on a sabbatical, but he is also paid at 80% of his salary. . However, in the context of a staff shortage, it may be difficult for the employer to replace this person for only one year.
“Employers can also accept that certain hours of work are done from abroad. For example, someone who is going on a trip for three weeks and who will work the first of three remotely. »