My name is Mark Goodfield. Welcome to The Blunt Bean Counter ™, a blog that shares my thoughts on income taxes, finance and the psychology of money. I am a Chartered Professional Accountant. This blog is meant for everyone, but in particular for high net worth individuals and owners of private corporations. My posts are blunt, opinionated and even have a twist of humour/sarcasm. You've been warned. Please note the blog posts are time sensitive and subject to changes in legislation or law.

Wednesday, May 7, 2014

The Burden of Singledom Part II - Average Salary Syndrome

Today, I am posting Part 2 of Rona Birenbaum's series on The Burden of Singledom. I thank Rona for her guest posts.

The Burden of Singledom Part II - Average Salary Syndrome
By Rona Birenbaum

Part 1 of this series highlighted the financial planning challenges unique to those living single.

There is an additional burden if the single person earns an average wage and is raising one or more children. The average wage in Canada is $48,250 per year ( *Statistics Canada – January 30, 2014 report). Nationally, the average ranges from a high of $69,500 in the Northwest Territories to a low of $39,450 in Prince Edward Island. In Ontario, where most of our clients reside, the average is $48,800. There is no question that at that level of income, let alone a below average income, raising children and covering the basics can be a challenge. There is rarely anything left over for
retirement savings.

It may be this group of Canadians that Provincial governments are focused on as they push for additional pension plan options for Canadians beyond the Canada Pension Plan (CPP). The Federal government is not in favour of an across the board increase, leaving it up to the individual provinces to introduce their own enhanced pension plan structures.

Whether or not there is an enhancement to the CPP or the introduction of supplemental provincial programs, it will require increased contributions by both employees and employers. It will be short-term pain for long term gain.

So, what financial advice would we give to single working parents earning an average salary?

It’s all about increasing income and reducing expenses so that life is affordable now and in retirement as well. Here are some ideas on dealing with both sides of the cash flow management equation.

Boost income

1. Focus on total compensation

This is a key part of the equation. Compensation is more than salary. Employees often underestimate the value of the non-salary benefits that are provided in addition to salary. Such benefits may include:

  • Performance based bonus incentive plans
  • Stock purchase plans – some offer contribution matching, others offer discounts on stock price
  • Health and Dental Benefits
  • Group retirement savings programs – those offering company matching of contributions are best
  • Tuition subsidies or full payment of relevant professional development courses
  • Employee referral bonuses – paid when identifying a potential new employee that is hired
  • Inexpensive, optional group life and critical illness insurance
  • Flexible hours and working arrangements such as teleworking

All of these programs have material financial value. An individual who has job paying $48,000 with a number of these benefits is at a distinct financial advantage to one who has a similarly paid job without such benefits.

One of the best financial moves that one can make to improve their overall financial well-being in both the short term and the long term is to position themselves at a company that offers a well-developed employee compensation model that isn’t limited to salary alone. Here are what some of the corporate leaders in this area offer their employees.

2. Ask for a raise

As the author, Nora Roberts said, “If you don't go after what you want, you'll never have it. If you don't ask, the answer is always no. If you don't step forward, you're always in the same place.” Amen.

To help you get up the nerve, and design a strategy for the big ask, check out this Globe and Mail article on the subject.

Spend Carefully

Spending carefully is more empowering than having to “spend less”. Living luxuriously is not the reality of the average earning single parent. What does careful spending look like?

  • Netflix vs cable
  • City subsidized children’s activities
  • Welcome quality hand-me-downs
  • Cook at home and bring lunch to work
  • Avoid ATM fees and other nuisance convenience banking charges
  • Always ask for a discount! Nora Roberts’ quote applies equally well here. Here is another handy Globe and Mail article to reference.
  • Take transit versus owning/leasing/financing a car – if practical.
  • Pay with debit, avoid credit at all cost unless you can diligently pay the card in full every month and only use the card to collect points of some sort.
  • Encourage children to get a part-time job when age appropriate (around age 16) and allocate at least half towards an education savings account.
As you can see, even an average earning person living single with or without children can take steps to improve their financial situation now and in the long term as well. 

Rona Birenbaum is the founder of Toronto fee for service financial planning firm, Caring for Clients. Rona is frequently contacted by the media as a resource on a wide range of financial planning subjects. This information is general in nature and is not intended to constitute specific tax advice for any individual. It is best to speak to your tax professionals for specific advice.


  1. Good job Rona. I enjoyed this.

    1. Thx Rob,

      Whats with the no shirt pic above. Wow, now this blog can double as a singles site :)