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Expert tips on how to stop living paycheque-to-paycheque

Living paycheque-to-paycheque can be stressful, to say the least.

Despite the implementation of minimum wage increases in several provinces this year, some may argue these increases still don’t constitute a livable wage based on today’s standards.

A Leger poll conducted in August, for example, revealed that 47 per cent of respondents said they were living paycheque-to-paycheque, left with little to no money after tackling their monthly expenses.

I’ll explain how to determine a livable wage based on your current lifestyle and expenses, while offering some practical tips to help you get ahead.


A livable wage is defined as an income that’s high enough to support a reasonable standard of living.

An individual earning a livable wage should be able to stay on top of their monthly housing and living expenses, pay for reliable transportation, and have some extra money to set aside for retirement and emergency expenses.

These individuals won’t be living in the lap of luxury, but they also shouldn’t feel stressed about whether they’ll be able to pay their monthly rent or put food on the table for their family while working full-time.

What constitutes a livable wage can vary from one region to another. For example, the living wage in rural Ontario would be lower than it is in downtown Toronto, due to the difference in housing costs.

Unfortunately, the living wage in various parts of the country rarely matches the minimum wage.

For example, Ontario’s minimum wage recently increased to $16.55 per hour. However, recent data compiled by the Ontario Living Wage Network (OLWN) shows the province’s living wage is slightly higher.

"Our living wage is actually $23 dollars and 15 cents,” Craig Pickthorne, communications coordinator with the OLWN, told CTV National News in a recent interview.


If you want to stop living paycheque-to-paycheque and give yourself more financial breathing room, the first step is to figure out what a livable wage looks like for you.

Once you determine your livable wage, you may consider:

  • Negotiating with your current employer for a raise
  • Seeking a higher-paying job
  • Picking up a side job
  • Pursuing training and education opportunities to increase your job prospects

With that in mind, here are four simple steps to help you calculate your living wage.

Step 1: Track your expenses and calculate debt payments

First, you need to calculate how much you’re currently spending on monthly living expenses. These include:

  • Rent or mortgage payments
  • Utilities and insurance payments
  • Transportation costs (car payments, the cost of public transportation, etc.)
  • Food and groceries
  • Personal expenses (spending on clothes, dining out, leisure and vacation)

The easiest way to do this is to review bank and credit card statements over previous months. For simplicity, you can also link your accounts to a budgeting app that tracks and organizes your spending.

It’s also a good idea to calculate your current debt and related monthly payments.

While payments made on extreme levels of debt might not be considered part of a “reasonable standard of living,” the reality is that many Canadians owe some level of debt and these payments should be factored into an individual’s budget.

Looking at Statistics Canada data from 2019, the median debt owed by Canadians ranges between $10,000 and $55,000, depending on their age.

Step 2: Research your region’s average expenses

Next, you should compare your monthly expenses to the average cost of food, shelter and other essentials in your region. You can do this using data from Statistics Canada. The federal agency’s latest data on household spending can be filtered by province, and the amounts listed are average expenditures per year, meaning they can be divided by 12 for a monthly amount.

Although this data is from 2021, it can still offer a good ballpark estimate of what your monthly expenses should be. Given the high inflation amounts recorded over the last couple of years, I would add at least 10 per cent to the prices you see from 2021. The data can give you some good insight and help you determine if you’re overspending in certain areas.

Statistics Canada has also compiled more recent data on average retail prices for key food items as well as gasoline and fuel oil. These monthly prices can be filtered by province and run up until September 2023. It’s also important to note that for housing to be considered “affordable,” it should cost less than 30 per cent of your pre-tax income, according to the Canada Mortgage and Housing Corporation.

When looking at your expenses, a higher-than-average monthly payment for an expensive apartment or automobile could be the driving factor behind your financial stress. In this case, you may be guilty of living beyond your means and could benefit from downsizing.

Alternatively, if your calculated living expenses are similar to or lower than the average costs reported by others in your region, and you’re still living paycheque-to-paycheque, this could indicate that you need to focus on increasing your income.

Step 3: Outline your goals and see where you can cut costs

The quickest path to stop living paycheque-to-paycheque is by cutting costs. There are various ways you can save money on groceries and other expenses during this time of high inflation.

For additional motivation, consider outlining some reasonable goals for the future. Examples could include:

  • Creating an emergency savings fund for unexpected expenses
  • Setting aside money for retirement in a registered retirement savings plan (RRSP) or tax-free savings account (TFSA)
  • Putting more money towards high-interest debt payments
  • Setting aside money for your child’s education in a registered education savings plan (RESP)

Step 4: Calculate your livable wage

Now that you’ve calculated your monthly living expenses and have identified areas where you can cut costs, you should be left with the amount of money you need to earn each month to live comfortably. Your goal should be to earn an income that is higher than that amount.


After calculating the amount of money you need to stay on top of expenses and sustain a reasonable standard of living, it’s time to take action and pursue the changes needed to reach your goal. It might not be easy and could require some sacrifices and hard work, but it is possible.

In order to earn more money than is needed to cover your expenses, you can either increase your income or spend less money.

Some find it beneficial to go back to school or obtain vocational training to qualify for a higher-paying job. Certain provinces, such as Ontario, may even offer to help cover the cost of your education.

Others may find it easier to cut back on unnecessary expenses such as dining out or shopping excessively, with some going as far as moving to an area with a lower cost of living.

Finally, reaching your income goals could include asking your boss for a well-deserved raise or applying for a higher-paying job in your field. Here are the best tips to get a raise in this economy.


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