Giving yourself a raise

[Judy Trickett]

Here is a perfect example of inflationary prices. According to the Bank of Canada, they forecast, for 2014, that compared to just last year, 2013, that for every $100 you spend it will now cost you $101.48.

That's a 1.48% increase. So, that means that in order for you to pay your bills and purchase food and supplies for the daycare etc it will cost you $1.48 for every hundred DOLLARS you spend MORE than last year. So, let's say you grossed $35,000 last year. THIS year, in order to have as money left in your pocket as you did last year you need to earn a gross salary of $35,518.

Now, it get even better. The rate of inflation between 2012 and 2014 is 2%. Imagine you didn't raise your fees at all (or for some of your clients) in the last two years. That means that $35,000 now needed to be $35,700. So now you have gone two years and lost out on $1200 just to cover the cost of increased cost of living. You still haven't given yourself an actual raise! You have absolutely no more money in your pocket! Those increases ONLY pay to keep you in bread and milk by last year's prices!

So, see? That is why you need to raise your fees! The average Ontario provider has the ability to work five days per week for 50 weeks at five kids. That means she has the ability to have 1250 "daily payments" every year. If you ONLY raise your fees by $1 a year you are merely making an extra $1250 a year. And, of course, for 2014, as I stated, you are spending $500 of that on the increased cost of living leaving you with only a $700 raise for YOUR pocket.