Have your first baby? These Money Moves Can Help Your Growing Family Succeed

Diaper changes. Power cycles. Weird, Google is looking for what the little bump on your little girl’s little finger might be. Unexpected visitors. Follow up with your employer for your Record of Employment to qualify for Employment Insurance maternity and parental leave benefits. Trying to sleep when the baby is sleeping (this advice is a joke, BTW…newborns have a knack for only sleeping when you’re awake….and being awake when you desperately need sleep – it’s like if they were on Singapore time).

Fatigue and forgetfulness are overwhelming for new parents. But one of the best ways to bring the “happiness” back to being a new parent is to cut out these four financial chores before the day of the birth, so you can enjoy those newborn cuddles.

Automate every possible aspect of your banking before baby arrives

If an invoice or payment can be paid automatically from your bank account or credit card, set it up. Most providers have an online payment portal that will allow you to register for automatic payment yourself. Others you might need to call.

Many credit card companies will allow you to set up an automatic “payment in full” pre-authorized debit so that the entire balance is cleared on the day it is due, avoiding any interest charges.

Start saving now for the cost of future childcare expenses and reduce your household income

Now is the time to earn money – like never before. In the first year, the baby’s expenses can reach $200-300 per month for wipes, diapers, nursing pads, formula and barrier cream, etc. Then you’ll probably want to consider contributing to an RESP in order to take advantage of it. of the Canada Education Savings Grant.

But the biggest cost is the hit to your household income. Whether you’re a couple or solo, you have to bank on much lower earnings (like half or even less) for the entire parental leave (usually 12-18 months), and beyond because once back at work, you You’ll pay for childcare which can range from $900 to $3,600 per month depending on the style of childcare you use…and you’re lucky if you have a parent or grandparent who wants a nanny for free!

Here is what I suggest you do to start the backup process:

Step 1: Make a budget (current state of affairs). What can you afford to start saving in a high interest savings account (rates have gone up on these accounts, BTW)? Now push yourself. What can you cut to save more…like 50% more or even double that. Or, what can you do to raise extra money (more shifts, sell your designer shoes, file your benefit claims). Start saving every spare dollar.

2nd step: Automate your savings contributions so that they are weekly.

Pro tip – don’t cut life and critical illness insurance out of your budget. I know it’s tempting to do this to cut costs, but you’re about to be a parent and having adequate coverage is more important than ever. And if you’re not covered, go for it!

Get the scoop on your benefits so you can budget for parental leave

If you are traditionally employed, you may have benefits to financially complement you (or your partner). Well before the baby arrives, get details on how much you can expect, for how long and if there are any nuances like a refund clause if you don’t return to work within a specified time. Most supplementary plans supplement the employment insurance benefits to which you may be entitled. You can take these numbers and factor them into a future parental leave budget. I’m a fan of budgeting apps like Mint or YNAB.

It’s also important to mark a day in your calendar to update your health benefits to include the baby after birth.

And, if you’re an entrepreneur, you may be eligible for Employment Insurance maternity and parental leave benefits for the self-employed (recently updated). Speaking from first-hand experience, you’ll want to hire someone (or assign someone) to cover your duties for a while when the baby arrives. The last thing you want to deal with from the hospital is chasing an overdue bill or dealing with payroll.

Space out purchases of baby equipment

The basics to focus on are having plenty of nappies and onesies for the first month, a crib, a car seat, a thermometer, a place to feed your baby (hint, the couch is free), bottles and formula milk (in case breastfeeding is not possible). not an option) and a stroller. If your friends and family are throwing you a baby shower, be strategic with your registry and focus on the essentials first, and the good ones second. Baby will eventually need additional items such as bigger clothes and a crib, but you will have at least a month or two after the baby is born to make these purchases. Space out these purchases and try to buy them on sale. You might even want to try to get everything used.

Taking care of these important financial priorities now will allow you to focus on your presence, your health, and your preparation for this exciting new chapter.


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