Having a baby is a big life change. It is a time of excitement and anticipation. There
is so much to do; shopping for baby furniture, a car seat, stroller and clothes. With all that soon-to-be parents are going,
many forget to do one of the most important things (no it's not take your folic acid) it's planning financially for the arrival
of your bundle of joy.
There isn't a parent out there that would
disagree, children are expensive, and we are not just talking babies. Statistics show the first 12 months of a baby's life
can cost more than $10,000. What about all those years after?
Gayla Cook, from Coast Capital Savings Credit Union, says
planning ahead is the key. "It's the best advice but it's hard to follow. If you can plan ahead, if you can make some
small decisions ahead of time, it will eliminate the extra stress, the financial stress." Money is the last thing any
new parent wants to worry about when baby gets home but Cook says it is essential.
The first thing to do is find out if you qualify for Employment Insurance. There are a lot of people who just
don't know the requirements. It's a good idea to do the research when you are thinking about getting pregnant, or at least
early on in the pregnancy, so you can make a financial plan. "If you are eligible for employment insurance, the basic
benefit rate is 55% of your average insured earnings up to a yearly maximum insurable amount of $41,100. This means you can
receive a taxable maximum payment of $435 per week", says Cook.
So
now you know what you are going to get, now it's time to get a budget together. Cook says it's important to first find out
what you are spending before baby arrives, for example, where does the money go and what are the discretionary things that
maybe you can live without. Remember, you could be living on a lot less than you are used to. You also need to start factoring
in all those additional baby costs, like diapers, wipes, formula if you are not nursing, clothes, and the list goes on.
Cook says when you are planning a budget remember EI payments are usually
issued within 28 days from the claiming filing day. That means there will be a 2 week unpaid waiting period before the benefits
kick in. There is a relatively easy and painless way to start stashing away cash for your maternity or parental leave,
she says. "I set up an automatic special term deposit. Only on my payday, every 2 weeks, $100 or $50 went into this term
deposit and it made a little bit of interest, more interest than if it were in a savings account. I just knew in the back
of my mind that was there and that would help me."
One final
thing parents should do to prepare for maternity or parental leave is get insurance, life or/and disability insurance. "Disability
in particular", says Cook, "the chance of you being killed is very slim, but the chance of you getting into a car
accident and hurting your back are quite high and then now you are off work." She says it's all about protecting your
family. "No one wants to talk about it, no one wants to spend the money, but it could be absolutely the most critical
thing that you do."
Having children is a life long commitment. Maternity/parental
leave is only for a year, but planning for a baby is about planning for a life.
