The pandemic forced us to take life easier, and then taught us to enjoy it.
This explains all the talk we’re hearing about work-life balance as the latest pandemic phase eases. People are thinking more about compartmentalizing their jobs, not letting them dominate their time and energy. Inevitably, there will be financial implications.
Working fewer hours, moving to a less demanding position or workplace, leaving a full-time position for freelance work, taking unpaid time off – each of these moves can lower your income overtly or subtly. Paycheques get smaller, bonuses get harder to achieve, or you might take yourself off the promotion track.
All might be well if we were able pick up where we left off in the less complicated prepandemic world of early 2020. Remember? The economic scene was a complete yawn – modest growth, tame inflation and interest rates trending lower. Where we are now, with inflation surging, work-life balance gets more expensive by the day. Can you afford it?
The year-over-year inflation rate last month was a 30-year high of 5.7 per cent, while average hourly wages gained 3.1 per cent. Basically, the country took a pretty substantial 2.6-per-cent pay cut last month.
Wage increases are on an uptrend – a recent Conference Board of Canada survey found employers were budgeting for wage increases of 3.9 per cent this year, the most since 2008. Combine a pay hike of this amount with cost-cutting at home and you might just fight inflation to a standstill in 2022. But that kind of economizing means going backward in lifestyle, something we’re not good at as a society.
Some sectors of the economy are starving for workers, which means they need to negotiate if they want to attract and retain people. Wage increases or bonuses that offset or beat inflation are possible, but think of the cost in lifestyle terms. Employers who offer extra compensation may expect extra commitment.
People who kept their jobs and incomes intact through pandemic lockdowns have a lot of money parked in savings accounts – as much as $300-billion in total. This is money that could be used to subsidize more work-life balance. For example, you could dip into this money to pay big annual expenses like car insurance or a family vacation rather than saving a bit off every paycheque. Net result: You have money from your paycheque to cover the rising cost of gas and groceries.
But this is just a short-term fix. Cash savings will eventually be drained down to nothing and, in any case, it’s a no-brainer to keep at least a few thousand dollars in liquid savings these days for emergencies. Just a glance at the news of the day – pandemic, war – makes the case for having a Plan B fund.
Young adults in particular have to be careful about decisions on work-life balance. Affording a house in today’s market requires full earning power to build a down payment and then carry monthly mortgage payments and other living costs. You need to maximize earnings today, and put yourself in a position for future pay increases that help you improve your standard of living and save more for the future.
Thinking about stepping out of the rat race today and then getting back in later? Women taking time out of the work force to raise children face what’s called “the motherhood penalty.” They can be penalized in their careers because they’re seen as being less dedicated to their jobs.
Working at home was one of the big enablers of a better work-life balance at the height of the pandemic. It’s chaotic to work from home with young kids, but the savings in time and money are huge. Limited daycare, no time or money lost to commuting, no lunches to buy and no work clothes to dry clean.
Meanwhile, a decisive shift seems to be happening in the attitude of some employers toward people working at home. They want butts in seats, at the office. Resist and you risk being marked as someone who chose life over work.
Of course, that’s a totally legit choice to make. It’s just that the cost keeps rising.
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