One step forward - two steps back...

[hunniebun]

So I discovered MMM just a few short months ago. Since then I have been cutting back on my spend- pants behaviour where ever possible and was feeling like I was starting to get some traction and increase my savings.  Sadly, I received a notice this week from my pay department that they overpaid me by mistake all of last year and will be reducing my pay by 375$ per paycheck for the next 6 months to recoup the overpayment.  Sigh.  So now I am at a stand still for the next 6 months in my savings goals until this is addressed.  I am looking for other ways to save, but the majority of my big expenses are fixed (daycare, mortgage, etc.).  I have cut back on driving, groceries, utilities, cable etc. to come up with an additional 1000$ per month to pay debt and save...so I will have to look at cutting those even further.   I am just feeling frustrated. On the bight side, since I have cut a lot of things back...this reduction in pay won't be as painful as it would have been a year ago. 

[KaizenSoze]

Stinks about your paycheck. Become a mustache is a process. Maybe this reduction in pay will help you fine other places you can save. Still stinks though.

[JLee]

That's unfortunate! On the bright side, at least you've cut back already -- imagine if you hadn't discovered MMM and had to take a $375 hit to your former budget!

[Thegoblinchief]

That's unfortunate! On the bright side, at least you've cut back already -- imagine if you hadn't discovered MMM and had to take a $375 hit to your former budget!

+1

[DutchMustachian]

That's unfortunate! On the bright side, at least you've cut back already -- imagine if you hadn't discovered MMM and had to take a $375 hit to your former budget!

Couldn't agree more, instead of panic and stress this is now merely uncomfortable.... That's à succes

[gt7152b]

You also got an interest free loan from your employer. Score!

[KD]

My first question is do you agree with their math?

What is the legality of this 'withholding'????

What would happen if you quit, would they be able to sue you??? 

I'd make sure I agreed with their accounting.

Agreed, since you are on the road to FI, the cost cutting corrections you've already done will ease the pain if it's true, and will help BURN INTO YOUR MIND that you always need your own reserves and to live w/i your means. 

Sucks eggs if true!

[hunniebun]

You also got an interest free loan from your employer. Score!

I did think of that! LOL! However, I wish I had a time machine and could go back and use that 'loan' more wisely!!!  It actually worked out okay in the grand scheme of things. My dh was off work (voluntarily) for 6 months last year so it was kind of nice to have the extra money then. He is back to work now in a better job...so we will be fine.  It is just disappointing that I had targeted saving all this money and paying off a small debt in 2015 and now the savings won't happen.  The debt will still be gone by August...so that is a plus.

[hunniebun]

My first question is do you agree with their math?

What is the legality of this 'withholding'????

What would happen if you quit, would they be able to sue you??? 

I'd make sure I agreed with their accounting.

Agreed, since you are on the road to FI, the cost cutting corrections you've already done will ease the pain if it's true, and will help BURN INTO YOUR MIND that you always need your own reserves and to live w/i your means. 

Sucks eggs if true!

That was my first question!  The provided the details and it is correct. The source of the error was that I work on a reduced work arrangement that started last year...so they processed it, but apparently I wasn't supposed to get paid statutory holidays anymore while on this arrangement because I was paid 4% additional for this. So I was collecting this 4% each pay...plus they paid me for the stats.  I didn't even know about this...my pay stubs are so cryptic that I actually have no idea what is going on with them...there are dozens of deductions and adjustments each pay for so many things and the pay is never the same, so it is not something I would have noticed (at the time...I am much more careful at reviewing my pay stubs now!)  Anyhow, what's done is done.  We will be fine and as soon as it is done, I can have that money automatically transferred and never miss it!

[RangerOne]

Payroll errors can certainly be upsetting. Thats why it can always be good to double check what they are doing.

When I started my current job they paid me full time to work part time... I complain to HR payroll and let them know my pay was screwed up. But bureaucracy won me some free money and they never asked for the over pay back, I guess it was only 4 months of it...

But yeah, being frugal does not prevent income fluctuations. It does however make you more aware of your financial health and flexibility.

[James]

Congrats on your efforts over the past few months, and looking forward to hearing updates as you go forward!

[Guesl982374]

More like two steps forward, one step back. Focus on the positive, the payroll mistake is only temporary, the new frugal muscles you are developing will be more permanent!

At the start of 2014, my wife and I both got large increases in pay and responsibility (oh yeah!). However, in 2013, instead of withholding more tax, she mistakely withheld less resulting in a ~$5000 tax bill for tax year 2013. We had to reallocate the withholding tax for the remainder of 2014 to avoid ending up in the same/worse (remember, higher salarys vs. 2013?) situation so we took a "pay cut" (I use that very very loosely) of ~$1k/mo. to avoid potentially paying penalties to the US gov't. No complaints though as we've continue to increase the 'stache year over year.

[HopefulMustache]

Agree with what others have said about focusing on the positive here, which is how much better prepared you seem to be for this surprise hit to the budget than you would've been. This stuff happens to the best of 'em.

I had a different but sorta similar experience - I was expecting at least a small raise at my job this month and was looking forward to updating all my FIRE projections, imagining how nice it would be to update them all slightly and watch the compounding ripple, but instead I was laid off. So much for the projections. I also discovered MMM just a few months ago, and I think it's helped me be better prepared to assess my financial health, not freak out, and get to work reducing expenses. It helps that I was also kinda ready to do something different, so I'm trying to be optimistic about the whole thing in general.

Sorry to hear about someone else's mistake ruining your plans, it's not a fun feeling but it sounds like you're ready for it. Good luck!

[Calvawt]

I would get some legal advice.  In California, we cannot take back any pay that was made in error without the employee's written permission. 

For something that old, I would have told my payroll manager to leave it alone (if I didn't fire the manager for making such a big mistake).

[Mr.Chipper77]

I think its pathetic as an employer that they made the mistake and are taking the money back (unless of course you had knowledge of it) and should eat it. But like others said focus on the positive parts of it and move on

[hunniebun]

I would get some legal advice.  In California, we cannot take back any pay that was made in error without the employee's written permission. 

For something that old, I would have told my payroll manager to leave it alone (if I didn't fire the manager for making such a big mistake).

I am in Canada and work for the Federal Government. They have to get it back because those dollars belong to the tax payer. I understand that.  They can do whatever they want to get it back as long as it is within the Treasury Board Policy. 

[Retire-Canada]

I would get some legal advice.  In California, we cannot take back any pay that was made in error without the employee's written permission. 

For something that old, I would have told my payroll manager to leave it alone (if I didn't fire the manager for making such a big mistake).

I am in Canada and work for the Federal Government. They have to get it back because those dollars belong to the tax payer. I understand that.  They can do whatever they want to get it back as long as it is within the Treasury Board Policy.

I was in the Canadian Army. Young guy living pay cheque to pay cheque and one pay day I got zero $.

I freaked out and went to the pay office to be told they had over paid me last year and I would not be getting the next two cheques as they clawed back the $$.

So I know where the OP is coming from. The CDN Gov't wants their money and they want it now! ;)