Starting a new career: changes for Ms. Loonie

I've mentioned a few times that Ms. Loonie has a new job. Today is her third day at her new employer, and so far she is very happy with her decision. She's in a very collaborative environment, and the work seems, even at this early stage, to be engaging and challenging.

There's also the minor matter of a 67% pay increase, but let's not dwell on small details.

With the new job, there are a few changes that have to be managed:

• Transportation - Her office is a half-hour subway ride away. Previously, we were both able to walk to work, so this represents an added monthly expense, in addition to the extra time spent commuting. We've budgeted for a monthly TTC Metropass, which is cheaper than purchasing the equivalent number of tokens, and also provides a tax credit.


• Clothing - The dress code in her new office is more professional than what she is used to. This means that, for the first time, she needs to have a selection of "work" clothes to wear. She and I may not quite see eye-to-eye on whether this is a pro or a con, but either way, we have a new expense to maintain her business wardrobe.


• Pay schedule - As I mentioned previously, her new employer is on a twice-a-month pay schedule, as opposed to her previous bi-weekly system. This means that each paycheque represents 1/24 of her annual take-home pay, so she ends up being paid slightly more per pay, but on a less frequent basis. We need to make sure that we can cover our fixed bi-weekly expenses during mis-matched pay periods. On July 10, our mortgage and student loan payments will be debited from our joint account five days before her July payday, so this will be our first trial.


• New payroll deductions - Not only has her salary increased, but the type of income she earns has changed. She was previously paid from a variety of research fellowships, and she is now earning employment income. This means that she will have income tax withheld, in addition to paying CPP contributions and EI premiums. She's actually quite excited to start paying into CPP and EI "like a grown-up".


• Better benefits - Her new employer has a good defined-benefit pension plan in addition to strong health benefits. We'll have to have a long look at our respective benefit plans in order to determine how to allocate our coverage.


• Tax withholding - although her new employer withholds income tax, her previous income was not taxed at source, so she will likely have a tax bill to pay come April 2009. After that, however, she should be able to enjoy some nice tax refunds in future years.

We're both very excited about this career change. It's an exciting opportunity, and has a number of strong financial benefits. I can't wait to see how we navigate the transition period, and what sort of long-term change this represents for the Loonie household.