Jordan's Retirement Savings

We got some great news a few weeks ago.  Jordan's employer is increasing the amount that they will match for his RRSP.  I mean, the really great news is that he's actually working somewhere that has a retirement program!  It's the first time ever.

The company establishes contributions based on previous years profitability and the employee's salary.  I'm not sure what the actual formal is, but last year it was matching up to $24/pay and 2016 it's increasing to $42 and change a pay.  I like round numbers so we're going to contribute $50/pay to get the full match plus a few extra bucks of our own.

Yay, it's like free money
Granted he has to stay with this company for five years to keep all of the employer contributions, but that's still pretty awesome considering his industry doesn't often have retirement benefits of any sort.

It's not 10% of his salary - which would be nice, but it gets us halfway there.  If we can get another $200/month in savings for his retirement that would be ideal. Our ability to swing that will depend a lot on what we wind up doing for housing here in BC and what I wind up doing for work in a years time.

Time will tell.

Happy 30th Birthday Jordan!

http://coolmotivator.com/send/happy-birthday/

Ask Jordan Anything

Jordan mentioned to me a week or so ago that he's been thinking about writing a blog post or two for me on his perspective of being married to a Personal Finance junkie.  In anticipation, I thought I would reach out to you to see if there's anything you guys would like to hear about in particular.

Feel free to leave a comment with your questions for Jordan.

Jordan's Income Potential

Yesterday I shared with you that Jordan will be getting a job promotion within the next couple of weeks.  I took the potential for his gross salary and broke it down based on current pay stubs and the Canada Revenue Agency's payroll calculator to get a close guesstimate of his potential net take home pay.

I highlighted the cells in  yellow that I know will change but that i'm not 100% sure what the premium calculations are based on - they likely will only change within a couple of dollars or so.

We're pretty excited that come July Jordan's take home pay will be increasing by about $114 -$175 a month.

Jordan is Getting Promoted

Jordan called me yesterday at work with some very exciting news!  After working at his truck/trailer rental company for the last three years as the Parts Supervisor, he is being promoted to the Repair Dispatch Manager.  

This promotion will open a lot of doors for growth within his company.  With this transition he'll now have two to three people reporting to him as well as a variety of increased responsibility.  As the job still has a huge parts element to it, he'll be able to finish his third, and final, year of his Parts Technician Apprenticeship.

They are offering Jordan $200-300/month increase in salary (don't ask why they talk like that, he is salaried) - with some quick math we see that they are offering $2,400 to $3,600 increase in pay.  As his current salary is $42,000 he's looking at ending up at $44,400 to $45,600 which is a 5.71% to 8.57% increase in pay.

At this point he doesn't actually know where in that range he's going to fall - but either way it's a significant raise (percentage wise).

I did a bit of research on salaries in Alberta for this job based on the NOC.

A starting hourly rate for this type of job in 2009 was $20.17 which equals = $42,000 the average rate of pay for this job in 2009 was $24.04 which = $50,000

So if they get Jordan up to $45,000 a year right now that seems fair with your three years parts background – but within two years I believe he should expect to be at about $50,000 (keeping in mind this data is two years old…so really it should be a bit higher because of cost of living and what not)….but it gives you a good sense of things.

Congratulations Jordan!  I am so proud of you!

All Set up....for the most part

We arrived back in the big city mid-afternoon today, I always want to stay visiting my family longer - but I always wind up feeling good that we got home in the daylight too.  We got all of our camping gear cleaned and put back into storage and Jordan bought a pizza for supper - that was a nice treat.

We watched The Bounty Hunter (which was hilarious by the way) and then I got down to business.  For the last hour and a half or so I have been preparing for our August 6th, 2010 - joint budget live date.

I've set up just about all of our atuomatic transfers - which we decided would be on a weekly basis (instead of bi-weekly or monthly) to align with our pay days.  Even with all that work, we still have quite a few things to do before we go live. We have to change banking information to the joint account for the following things:

• Jordan
• Truck Insurance
• RRSP
• Payroll
• Jessie
• Car Insurance
• Horse Board
• Student Loan payments
• Payroll

A few other things on the to-do list include:

• Merging our Air Miles accounts.  I used my account number to sign up for the CC - so we'll merge Jordan's number w/ mine
• Renew my CAA membership and add Jordan on to the plan

Jordan Got a Raise!

I am so proud of him!

He started working at the company he works for almost a full two years ago, and yesterday he had his first performance and salary review.  Thankfully, he had recently completed his first year apprenticeship and passed with flying colours - which resulted in an awesome review.

Jordan's raise was 9.375%!

His salary went from $38,400 to $42,000!  His manager had first offered $40,800 and after a conversation about expectations and the work that Jordan has done on top of the money he's saved his company - he negotiated up to $42,000 which was exactly what he wanted!

What does that mean?  It's.

$3,600 more annually

$300 more a month

$138.46 a pay day

$1.73 an hour

So, all of those numbers are before tax - I want to know what the raise will actually net him.

After a little spreadsheet math, and using the CRA's payroll deduction calculator. 

I estimate that Jordan will have an extra $100 every pay day.

What he does with the extra money - is totally up to him.  I have (of course) made a few suggestions.  There's two things, one I'd love to see him do.  

One: Increase his RRSP contributions from $25/pay day to $50/pay. 

Two: I'd love for him to have an emergency/travel/planned spending whatever fund.  

                      Just a spot to put money - for him - for later.

Jordan's Bi-Weekly Budget

Here it is folks, the first of Jordan's bi-weekly budgets that has no truck payment!!

For the next couple of weeks he'll likely have Visa payments of $150-$200 to have that cleared off - and then he's set.  We're both looking forward to having a bit more flexibility week-to-week.

an Update on Jordan

I talk about him and I quite a bit on this blog, and every now and again i share things about his truck loan or other such things - even though this blog is all about Jessie's Money.

I'm pleased to be able to share with you that his truck loan is so so so close to being paid off.  He's been steadily paying $150/bi-weekly for the last several months and his current balance is now $512.87.  This month, he'll be get a benefit cheque of $400 and that will be applied directly to the loan.  As long as it comes on time, he'll be 100% debt free this month - and at the latest, next month.

He's given his Visa to me - much like I gave him mine a while back when I was having troubles not using it.  It's about half paid off and he's got about $300 to go.  That too should be paid off by the end of this month.

I'm so proud that he's making headway on these two things and I know he is too!

Here's an image of his spending for the next two weeks:

After all his fixed expenses as well as a Visa Payment, paying for the lunch truck and a tank of gas - he'll have about $100 for entertainment/other - which is the same that I give myself every two weeks.

He's so looking forward to having the truck paid off - which will give him an extra $150/bi-weekly.

I've told him what I think, and he's said what he thinks he should do - but I'm curious, what would you suggest he do with it?

Questions for Couples: My Response

Thank you to those who left comments yesterday - I could tell the responses were heartfelt and thoughtful. Jordan and I talked some last night and he is happy with whichever choice I make.

I think, depending on the raise, I will likely funnel the extra money to my student loans to wipe them out.  Once that's done and the trucks paid off - we can look at if we want to make changes to how we have our joint accounts set up.

Question for Couples - When do you put more in the pot?

Jordan and I are at a point where things are humming along really nicely. We have our joint savings account for our house fund – which we each contribute $150/bi-weekly too and we have our joint chequing account for rent and the household utilities. We also hold roommates damage deposits in this account. We each contribute $287.50/bi-weekly – which covers our share of rent/bills.

On to the variables – Jordan and I each contribute $100/bi-weekly to our ‘food jar’ so the division of grocery/personal care/cleaning supplies is split evenly.

There ends our ‘joint’ financial endeavors. We usually split costs of eating out or other entertainment, but it’s not clearly defined – and that works for us right now. When it comes to large purchases – we usually talk about them first, but at the end of the day we each still have our own pots of money.

Now, here comes my question.

April is salary review time each year at my company – and I’m likely going to get a raise of 2% (not significant enough to change things) however; I may get a boost from $47,000 to $51,000….That’s pretty huge. That’s close to 6.5% - which is significant.

I think that if my income gets that big of a boost – I should put more into the ‘pot’. I figure – a gross increase of $4,000 will net me about $107/bi-weekly.

Right now – Jordan is very aggressively paying off his truck and thus his discretionary income is not very flexible. If I put more into joint he would have more flexibility in his budget.

I’m wondering what you do in your relationships – and what you think is fair? I was thinking maybe I would contribute $50 more to groceries (and Jordan would keep $50) or maybe it would be easier to adjust our joint account contributions to say $260 biweekly for jordan and $315 for me? or Does it makes sense to just leave things alone - we've been together for two years now.

To help give some context, I’ll share an average snapshot of my bi-weekly budgets and Jordan's.  I have two of Jordan's below - so you can see what the month looks like.  We've gone a long way to find some balance between each pay period - but they are still lop sided.  You can see one week he has about $55 for un-budgeted expenses and the next he has about $175. 

Olie is the lunch truck that comes to his place of work every day and Telus is his cell phone bill. We're getting better at making lunches - but realistically there will usually be a cost to this.

Here's my next bi-weekly budget (though you've seen a lot of these):

Of course things like horse board, car insurance, the gym and our cell phone bills only happen once a month - this is reflective of what we have left over on any given pay period.  You can see that my car insurance costs more then Jordan's but my cell phone bill is cheaper then his.  There are also some expenses that are different.  Jordan has a gym membership ($54/month) and I have a horse ($165/month).

So that was the current picture....if I get a raise - and have an extra $108/biweekly - how much do you figure is reasonable to chip into our joint pot and how much should I keep to funnel into savings and debt repayment?

The Truck Loan

Last week I posted a question that Jordan had about some vacation that his company wanted him to either take or have paid out.  After some really excellent feedback (thank you everyone), he decided to request the pay out and put it towards his truck loan.

His company works quick!  They paid him out yesterday, along with his regular pay.  He requested an even $500.  After deductions that worked out to be $341.60.  With his brother staying with us, he's decided to keep the $41.60 as he'll probably need an extra tank of gas and pay $300 towards the truck loan.

I've just completed the online request to make an additional loan payment  - the online system said that it can take up to two days to process.  Given that it's Friday morning, I won't call the bank until Wednesday morning (if it's not processed by then).

So lets have a look at the numbers:

Current Balance: $2,373.49
Less Vacation:         300.00
New Balance      $2,073.49

With an interest rate of 9.25%, of each $150 payment (bi-weekly) $141.10 goes towards the principal of the loan.  That means that there are now 13.82 bi-weekly payments left.  Rounded to 14, the truck will be paid off by July 29, 2010!!  Wow! Jordan will be complete debt free by this summer!

This Weekend

So... what did we do this weekend?   I didn't post a list like some did, but there were a few things we wanted to and got done.

• We bought my great aunt a laptop (she paid for it, we just shopped for it).  She wants to be able to e-mail family.  She's 80, and never experienced a computer before, so it'll be pretty interesting to teach her how to use it.  We've got it set up, and i'll probably deliver it on Tuesday.
• Played WOW! Yea.. that wasn't really on the to do list, but I asked Jordan what we accomplished - and he said 'we played wow.
• We did some grocery shopping (and yes, i kept the receipt and will be posting a summary of my spending at the end of this two-week period).
• We got a huuge start on cleaning out the basement.

When we had all of our roommates shuffling around for the past couple of months, the basement became a sort of dumping ground.  We have Jordan's little brother coming to stay with us for a couple of weeks (starting Wednesday after school), and it was important that we gave him a space to hang out that wasn't his bedroom, or the living room - because we're just not very cool these days lol.  I really want him to be comfortable during his stay.  There's still some saving, selling and donating to do - but it's coming along.

On the PF side of things, Jordan's mom is giving us $150 for the duration of his stay.  Jordan and I give ourselves $50/week/each for groceries - so figured that $100 is safe for his stay, and the $50 is for any other incidentals that may come up...that said, neither of us know how much a 14 year old eats.  Any tips?

Jordan's Response

...to yesterday's questions was:

@Jessie's Mom - I have carry over due to the fact that my employment date started Aug 8th of 2008. Of which time I didnt take any vacation hence the roll over.

@Frugal Dreamer - aside from not having a performance review since I've started working here... its been great. I've been blessed with having only 2 bosses ever that were intolerable.

@All - I am going to cash in the vacation pay as being able to have the truck paid off during the month of July (which is my birth month) that'll be my xmas present to myself :) Also I was planning on re-investing my tax return for our savings goals... so either way I win :)

Thanks for all the feedback on my situation

Jessie Says > He did leave the above in the comments section this morning, but I thought I would post it for those folks who don't go back to read them.

Vacation Pay: Carry Forward or Pay out?

I'm sure most, if not all, of you know that my boyfriend/common-law partner is Jordan.  He receives each of my blog posts via e-mail, reads them, and rarely comments - though sometimes we talk about them after work if something was particularly interesting for him.

He's called me - and has a question for all the Jessie's Money reader's out there.

Unlike Frugal's partner H, who's Boss in an Ass,  his employer actually tracks and pays for vacation properly.  He's just found out that he has $527.39 worth of vacation left to take from 2009.  His employer is giving him the option to carry it forward to 2010 or to have it paid out.  He'd like your/my help in figuring out what to do.

I'll break this down for you.

His annual salary is $38,400 (or approximately $18.46/hour).  That means the above mentioned amount of vacation is worth 28.56 hours or 3.57 days (based on an 8 hour work day).

Jordan mentioned that after taxes, his net pay was $30,000 which means his marginal tax rate is 21.88%.  So, if we deduct 21.88% from $527.39 Jordan would receive a payout of approximately $412.

He has given me these five options:

1. Leave the 'money' as vacation, and use it during the year.  I kind of like this idea because I get 3 weeks vacation each year, and Jordan gets 2 weeks.  Keeping the 3.5 days would mean we could take more time off together.

The next four involve having the vacation paid out.

1. Use the money to play - new video games or some other such thing!
2. Use the money to contribute to his newly opened RRSP (currently has about $550)
3. Use the money to contribute to our house fund
4. Use the money to pay down his only debt, the personal loan we took out to get him a truck.

With regards to the debt, I'll give you some details.

We took out the loan for $4,500 a while back, and Jordan was making payments of $216.06/month - which would have the loan paid off in two years, $8 of that payment was also for loan insurance b/c at that time our jobs were uncertain.  In September '09, Jordan increased his payments to $150/bi-weekly which shaved off about 6 months to the re-payment timeline.

The loan is currently sitting at $2514.59 w/ an interest rate of 9.25% - which leaves 17.88 bi-weekly payments left or a Debt Elimination Date of Sepetember, 2010.

If he uses the money to put towards the loan, it would result in 14.95 bi-weekly payments, or give him a Debt Elimination Date of July, 2010.

Phew - okay, so I've obviously put more thought into the debt repayment option - but don't let that sway you (it's just kind of what I do).

So - what should Jordan do?  Should he keep the vacation as vacation or should he request a payout.  If he get's it paid out - what should he do with the $412 he'll receive...

Thanks All!