When you hold your newborn for the first time, the only thing you want to be thinking about is how perfect they are. You don’t want to be thinking about how to afford the mountains of diapers you’ll soon be buying. The first year of parenting is a perfect financial storm – not only is it expensive but it’s also when families have less money coming in.
Before you go into panic mode, remember many other families have weathered the same financial storm. You can create a plan to help you thrive financially during this amazing first year and ensure that you don’t miss out on precious moments because you’re worrying about money.
Here are 6 ways you can prepare and enjoy your parental leave:
1. Make Sure You’re Set
Money can be tight while you’re on parental leave and the last thing you need is to spend hours on hold with the Employment Insurance office while your baby wants to be fed. Before you go on leave, make sure you’ve done everything you need to ensure your E.I. benefits are available.
2. You Don’t Need It All
The baby product industry tells parents they need all sorts of things. From video monitors and designer strollers, to ergonomic baby changing tables, sometimes you just have to say no. The crib set you love might have a beautiful matching dresser and changing table that would be nice to have but do you really need it? If it’s going to cause you to stress about money – then it’s not worth it!
3. Used Can be Better Than New
Your newborn isn’t going to care how Pinterest-perfect their nursery is. Buying a used bassinet can save a ton of money. Likewise buying other gently used items like clothing, shoes, strollers, and toys can stretch a budget. Just be wary of buying used cribs and car seats, which can be recalled, damaged or expired and unsafe.
4. Find Ways to Cut Back
Look for areas in your budget where you can redirect funds. Remember before you had a baby, when you used to go to movies or dine out every week? Well, that’s likely not possible anymore, which means that you can save cash to redirect towards baby food. Consider selling your second car to save on insurance, gas, and car payments. Cancel your cable subscription and get a cheaper streaming service. Exercise at home instead of going to the gym. Go through your budget carefully and identify ways to cut back.
5. Up Your Household Income
Cutting back can be helpful, but sometimes it’s more effective to increase your income. While the parent on leave will likely have their E.I. benefits affected if they earn money, the other parent is able to take on extra work or freelance in order to make ends meet. Consider tutoring or doing consulting work – whatever will help bring in a few extra bucks each month.
6. Sell Your Stuff
You know that guitar that you bought, played for a few weeks and then abandoned? Now might be a good time to sell it to help get through a financial dry period. Look around your house to see what you can get rid of and make a little extra cash to help with the added expenses.
While parental leave can be a stressful time, the best way to handle the financial worries is to be proactive. It’s important that you have a plan and to realize that parental leave is a short time period in the grand scheme of things – enjoy every minute!
This article is intended as general information only and is not to be relied upon as constituting legal, financial or other professional advice. A professional advisor should be consulted regarding your specific situation. Information presented is believed to be factual and up-to-date but we do not guarantee its accuracy and it should not be regarded as a complete analysis of the subjects discussed. All expressions of opinion reflect the judgment of the authors as of the date of publication and are subject to change. No endorsement of any third parties or their advice, opinions, information, products or services is expressly given or implied by Royal Bank of Canada or any of its affiliates.