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Your Debt Payoff Timeline Will Change – And That’s Okay

Your Debt Payoff Timeline Will Change – And That’s Okay

May 2026 September 2021 August 2024 May 2021 March 2020 What do these dates have in common? They were all, at one time or another, dates when I thought I would make the final payment on my student loan debt. Right now I’m hovering around […]

Debt Payoff Report – May 2018

Debt Payoff Report – May 2018

This month was a little hectic with work travel, but I pushed through and made decent progress! In May I bought tickets to Cirque du Soleil, 3 months of Spotify premium, and a dress to replace two that had worn out. Including interest, I’ve paid […]

Behind The Price Tag

Behind The Price Tag

I’m not shy about the fact that I continue to buy non-essentials even though I’m on a journey to be debt free. Today I’d like to share with you some of the random things that I think about when making those purchases. I don’t do these calculations every time I spend money, but I think it’s an interesting perspective.

I recently bought a new backpack, a Matt & Nat Brave in Black if you’re curious. (I was disappointed to read this post on their materials/manufacturing, so I can’t say I wholeheartedly recommend them anymore.)

The initial price was $145.00, and most of the time we don’t think beyond that. Today I want to talk about the hidden costs behind the price tag.

Sales Tax

Sales tax is an obvious one. In Canada our sales tax is added to the base price of the item upon checkout.

Adding in the 7% provincial sales tax (PST) for British Columbia and 5% federal goods and services tax (GST), we’re now at $162.40 total.

  • $10.15 provincial sales tax
  • $7.25 federal goods and services tax

Most of us would stop there, but that’s not the full picture.

Opportunity Cost

Opportunity cost is the loss of potential gain that I could have earned if I used my money in a different way.

My highest interest debt is a student loan at around 6%, so even though I have no credit card debt I’m essentially borrowing at 6% to buy this item. To simplify the calculations, let’s just say I’d only be carrying the debt for one year. That means adding another $9.74 and we’re up to $172.14.

Now, what about all of the taxes that came off before I got paid?

Pre-Tax vs Post-Tax Dollars

Canada has a progressive tax system, which means that the marginal rate of tax increases at various levels of income.

Canada’s federal income tax rates for 2018:

  • 15% on the first $46,605 of taxable income, +
  • 20.5% on the next $46,603 of taxable income (on the portion of taxable income over 46,605 up to $93,208), +
  • 26% on the next $51,281 of taxable income (on the portion of taxable income over $93,208 up to $144,489), +
  • 29% on the next $61,353 of taxable income (on the portion of taxable income over 144,489 up to $205,842), +
  • 33% of taxable income over $205,842.

Provincial tax rates for 2018 (British Columbia):

  • 5.06% on the first $39,676 of taxable income, +
  • 7.7% on the next $39,677, +
  • 10.5% on the next $11,754, +
  • 12.29% on the next $19,523, +
  • 14.7% on the next $39,370, +
  • 16.8% on the amount over $150,000

I like to think about it like this:

The first $20,000 I earn is for rent and bills, taxed at 20.06%. The next $35,000 I earn is for student loan payments, taxed at 20.06-28.2%. Then food and non-essential items like travel and purchases which would be taxed at 28.2%.

I prefer to imagine that I pay the highest amount of income taxes on non-essential items (even though I completely understand that’s not at all how it works!), because it’s more motivating for me. Apologies to any tax professionals out there! It’s just a mental strategy that helps me prioritize basic living expenses and debt repayment.

Buying this bag with $172.14 of after-tax dollars means I needed to earn $220.68 in gross income.

  • $35.29 federal income tax
  • $13.25 provincial income tax

If you’re following along so far, that’s $75.68 dollars that were unaccounted for on that initial price tag – more than half of the original $145!

That’s not all. What if I chose to use that money for retirement savings instead?

Tax Advantaged Retirement Savings

If I were to invest the money into a registered retirement savings plan (RRSP) instead, I wouldn’t pay any of the taxes on that $220.68 right now. I would instead defer the taxes and pay them based on my income in retirement, which will very likely be less than I’m making now and so I would pay less in tax.

If I were to invest that money into a tax free savings account (TFSA) instead, I’d pay the federal and provincial income tax and be left with $172.14 in the account. This amount would grow tax free, and I wouldn’t be taxed on withdrawals later.

Compound Interest

If I invested the $220.68 and it grew at a rate of 5% annually, in 10 years I’d have $359.46.

Investing a similar amount every year instead of buying an item would give me $3,273.94!

That doesn’t sound like much, but consider how many things we’ve purchased without much thought only to donate or sell them shortly after. Imagine if we cut back on that mindless spending and started investing it instead, for retirement or to pursue other goals.

Storage, Care & Disposal

One of the things that we rarely think about when we purchase a new item is what will happen after those initial moments of unboxing excitement. Of course we’re not thinking about disposing of something before we’ve even purchased it, but we should be!

If you’re paying for an additional room or a storage unit to house your possessions, that adds to the cost of ownership. Same with cleaning or disposal fees, or even just the time it takes to sell or find somewhere to donate an item.

It’s Not All About Money

Obviously, this is just a thought experiment because I’ve already bought the bag! I don’t regret the purchase, nor do I feel bad that I didn’t send every penny to debt or retirement.

Surplus money should be spent on more than just building wealth. It’s important to enjoy ourselves, and it’s valid to find some of that enjoyment in the purchase and use of material items – within reason.

It’s fun to think about these things occasionally, but poring over spreadsheets and optimizing every decision is no way to live your life. With that in mind, just remember this simple rule:

You can’t afford something unless you can buy it twice. – Jay-Z

Is there something on your list that you’ve been putting off buying? Or a recent regret?

The True Burden Of Gifts

The True Burden Of Gifts

You may be wondering why I’m talking gifts right now, when one of the largest gifting seasons is in December. Well, summer is the perfect time to plant the seeds of anti-consumerism in the mind gardens of friends and family. We tend to be outside […]

Saving For Retirement Without Losing Hope

Saving For Retirement Without Losing Hope

Retirement is always a scorching hot topic. Money issues are emotional to begin with, but it’s easy to feel hopeless considering the rising costs of education, housing, childcare, and healthcare. Add to that the unrealistic advice we receive (occasionally in the form of shame masquerading […]

Debt Payoff Report – April 2018

Debt Payoff Report – April 2018

I feel like every month I just want to comment on how quickly the month passed. (Except January, because January lasted 74 days this year.) April was kind of a blur of work-related stress that I’m glad to put behind me!

In April I bought a new screen protector for my phone, Stardew Valley on the Nintendo Switch, and a pair of sneakers.

Including interest, I’ve paid $2,885.35 to my debt this month!

April Milestones

I’m under $80,000 owing! There is serious magic in dropping down to a new first digit. I’ve also paid off $10,000 this year and over $50,000 in total!


What’s up in May?

I have peaks and valleys in my debt repayment timeline and May is probably going to be a valley. I’m traveling for work and I have a couple of planned purchases that will slow me down a bit. That’s all part of the journey though!

Everyone Needs A Fuck Off Fund: The Relationship Edition

Everyone Needs A Fuck Off Fund: The Relationship Edition

YES, E-V-E-R-Y-O-N-E! Even if you’re in a relationship and you have joint savings, you each still need your own Fuck Off Fund. If you haven’t read A Story of a Fuck Off Fund by Paulette Perhach, it’s a must! Perhach refers to the Fuck Off […]

An Insider Guide To The Instagram Debt Free Community

An Insider Guide To The Instagram Debt Free Community

I owe a lot to the #debtfreecommunity on Instagram. I started an account as an online diary to track my progress and keep myself accountable in paying off six figures of student loan debt. At the time, I didn’t even know that an online debt […]

Are We There Yet? Persistent Gender Differences In Careers And Money

Are We There Yet? Persistent Gender Differences In Careers And Money

We achieved gender equality when women could vote and work, so we no longer need feminism. Right?

Looking into the history of women and money in Canada, and many other countries, it’s easy to feel like we’ve come a long way – and we have. Legislation requiring equal pay and prohibiting discrimination on the basis of sex has improved women’s lives dramatically. It can sometimes seem like we’ve done all the work needed, and that if things are better than they were before (or better than they are in other countries) that means we don’t have to continue to improve.

There’s only one problem: changing the law is never enough to fully change socialized behaviour, and thinking that it is leaves us at a greater disadvantage because we believe the issue is resolved.

It’s hubris to think that humans can change deeply ingrained social norms that have held for much of our history in a mere generation. Socialization and implicit biases linger decades and even centuries later, and ignoring them does us all a great disservice.

Girls Are Still Socialized Differently Than Boys

Unsurprisingly, socialization begins practically from birth – and everything from how we play to how we speak to the toys we give can impact a child’s developing view of the world.

Even a baby’s cries can receive different responses based on caregiver biases. Low-pitched cries are more likely to be attributed to boys and are perceived as more masculine, despite pitch having no measurable sex differences in babies. Adult men also assume that boy babies are in more discomfort than girl babies with the same pitch.

We tend to play with girls and boys in different ways. In a BBC study, adults chose gendered toys and played with young children in a gendered way. Marnie, dressed in a blue plaid shirt and referred to as ‘Oliver,’ was given a robot and a car and played with in a more physical manner. Edward, dressed in a floral dress and referred to as ‘Sophie,’ was given pink dolls and stuffed animals and treated more gently. Our behaviour changes with a child’s apparent gender, and both men and women in the study showed these biases.

The types of toys children play with can significantly affect their cognitive and social development. Spacial recognition, a skill required for careers in engineering and science, is developed by play with construction-based toys and some types of video games. The gender differences in this skill disappeared when researchers accounted for differences in early childhood play – women who played with construction-based toys as children performed equally well as men. Often gender-based marketing and toy selection limits the availability or desirability of toys to either girls or boys. Toys with a technology focus were three times as likely to be targeted at boys. These early experiences can have lasting effects on education and career choices.

The way children are perceived and taught in can impacts their future in the workplace. Researchers found that teachers perceived male students as being their best students – more logical, competitive, interested in math, and possessing greater scientific skills.

Gender composition of the workforce can be another factor in children’s occupational aspirations. If we grew up regularly seeing female nurses and male doctors, for example, these interactions can influence our own career aspirations in the medical field.

Gender norms may be evolving, but we’ve raised and educated children with implicit biases for decades after the laws changed to prohibit discrimination based on sex.

We Still Judge Women Disproportionately On Physical Appearance

Being conventionally attractive can be an advantage in the workplace in some circumstances. Women who conform to beauty standards – makeup, hairstyles, manicures – earned more than women who don’t. Note that grooming accounted for all of the attractiveness ratings for women, but only half for men. However, attractiveness in women is considered a disadvantage in many professions – particularly in traditionally male jobs like mechanical engineer or director of finance.

Workplace norms are also implicitly masculine when it comes to body image, so women’s bodies can be seen as different, sexual, or disruptiveIn one study, 25% of women were cautioned about their appearance while just 9% of men were. Managers deemed female employees a ‘distraction’ in 35% of responses.

Here are just a handful of the ways in which women’s bodies are criticized and sexualized in educational and workplace contexts.

These socialized biases reinforce the image of women as sexual objects, and distract from their more important qualities in the workplace like intelligence and competence.

We Still Speak To Women Differently About Money

The way we continue to speak to women and men about money reinforces the gender divide.

The language that we use very much signals the importance (or unimportance) of certain activities to certain genders.

We Still Pay Women Less

There are a number of factors involved in the difference between wages earned by men and women. Regardless of how the data is manipulated, women in Canada earn less than men.

After controlling for industry, occupation, education, age, job tenure, province of residence, marital status, and union status, Canadians were still left with an 8% wage gap which researchers suggest could be explained by bias.

Socialized bias is key in understanding the persistent wage gap. Here are some examples of disproportionate treatment of women likely explained by bias.

One of the more insidious arguments about the gender gap is that it’s due to women’s choice of careers and child care arrangements. Research found that women who have their first child before 25 or after 35 close the salary divide, but the years in between (prime years for both child rearing and career-building) seem to be the problem. Taking on child care and other household responsibilities often translates to being passed up for career opportunities, while giving male partners more support to succeed in their own careers.

Part of the ongoing frustration with the gender wage gap is the fact that women spend so much time doing unpaid work – about 4.5 hours per day on average, according to the OECD. That’s more than twice the amount of time that men spend on unpaid work – 2 hours per day on average. The discrepancy of pay reflects larger issues about how we as a society define ‘work’ and productivity.

Housework is not work. Sex work is not work. Emotional work is not work. Why? Because they don’t take effort? No, because women are supposed to provide them uncompensated, out of the goodness of our hearts. – Jess Zimmerman

The wage gap only widens for women of colour, Indigenous women, those with disabilities, and the LGBT community.

How Do We Move Forward?

It’s imperative that we recognize that our work on gender is not even close to complete. If women are still sexualized at school and work, still talked down to in the media, and still paid less.. how can we possibly be equal?

Our society harms women and men, and we need to keep pushing the boundaries of gender to improve life for everyone. To bring systemic changes, we need systemic interventions – things like affordable child care, flexible work environments, and decreased socialization along polarized gender norms. These systemic changes need to include a shift in attitudes. It’s vital to listen and give deference to the lived experiences of individuals most affected.

Listen to women. Believe women. Pay women. Elect women.

Gender is a difficult topic, but a little understanding can go a long way.

Additional Resources

Here are some of my favourite lists, articles, documentaries, and podcasts on women and money:

Female Personal Finance Blogs – Women Who Money

Meet The Women Of The Financial Independence Movement – Tread Lightly, Retire Early

Here’s to Strong Women: The End of the Damsel in Financial Distress – She Picks Up Pennies

One Reason Women Make Less Money? They’re Afraid of Being Raped and Killed. – BitchesGetRiches

Let Men Be Free From The Shackles, Or Why The Gender Pay Gap Matters To Both Sexes – Ms ZiYou

The Intersection of “Me too” and Money – Broke Millennial

Emotional Labor – The Fairer Cents

The Financial Harm of Beauty Standards – Dumpster Dog Blog

Phrases to Boost Girls’ Self-Esteem – Other Than ‘You’re So Pretty’ – Motherly

Miss Representation – Netflix

Obviously, this is just the tip of the iceberg. Please share your comments and articles below!