Money Tips For Parental Leave That Don't Break The Bank
One of the hardest parts of the first year of having a baby is rarely discussed openly. It's not the lack of sleep, or the muffin top, or even the lack of sex; it's the lack of money.
Going from two incomes to one is very difficult on the bank balance. There is less disposable income and yet more costs, not to mention all the extra time you have window shopping and in need of coffee.
But the greatest damage may be to your psyche. It is not easy going from being a wage-earner to a spender and for many couples that is a very difficult transition.
Did you know having a baby can cost you an extra $10,000? Yikes! (And let me tell you, it doesn't get cheaper from there.) TD Canada Trust has some tips on saving for a baby's first year and produced the accompanying infographic.
Here are my (not always followed) tips to managing the money stress during parental leave:
Understand the costs: Do you know how much you are going to earn while you're off? Do you know you won't collect your benefits for two weeks? Have you worked out what your new income will be?
Budget: Once you know what you will be living on, make a budget. It is up to you how detailed you make it, but don't forget that babies grow fast, need lots of stuff, take programs and are easy to spend money on. The Queen of Budgets, Gail Vaz-Oxlade, suggests working out the budget with the reduced income for your maternity leave while you are pregnant and then living off that budget for the entire pregnancy. That way, any savings can be put towards emergencies that will most certainly come up during the first year.
Talk to your financial adviser or someone at the bank early in your pregnancy: You have to look at your whole financial portfolio because your RRSPs may take a hit, and an expert can help you figure out if you need a TFSA (tax-free savings account) or are eligible for tax incentives. Even if you have never spoken to anyone in the bank before (yes, there are people behind the machines), you can still talk to an expert.
Be honest: Planning, researching and saving are all important parts of paternal leave. But in a recent conversation with some bloggers and people from TD Bank, most people stressed the importance of having constant, honest conversations with your partner because it is one of the hardest things about being home. Talking about money is one of the most stressful parts of a marriage, and when you mix in lack of sleep, you have a powder keg of issues. Resentment can build when feelings of guilt and financial insecurity do not get expressed.
I think that worrying and feeling guilty over money can be very damaging to the enjoyment of staying home with a baby.
Did it affect you when you had a baby? Did you budget for your parental leave? How did you approach the money issues that come with a baby?
image: TD Canada Trust
Want more chaos? Last year, Michelle Duggar announced her 20th pregnancy, which she sadly lost. Recently, she debuted a new haircut. Have we had enough yet? I think so.
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